In this paper we evaluate empirically the relative importance of two explanations of Yugoslav interindustry income differentials. One explanation, proposed initially by Vanek and Jovicic [1975], stresses capital market imperfections which permit capital rents to be appropriated as workers' incomes. The second explanation points to labor allocation problems under self-management. We first present a critique of the Vanek-Jovicic original formulation and then respecify the problem to permit simultaneous evaluation of the two schools of thought. Results based on two data sets suggest that labor allocation factors and monopoly power rather than capital rents are the main source of Yugoslav earnings dispersion.

We investigate how the regional institutional environment—in particular, the political environment—affects Russian new firm entry across regions, industries, firm size classes, and time. We find that entry rates in Russia are explained by natural entry rates and the institutional environment. Industries that are characterized by low entry barriers in developed market economies are found to have lower entry rates in regions subject to greater political fluidity, as in the case of gubernatorial change. We also find that higher levels of political fluidity and democracy increase relative entry rates for small-sized firms but reduce them for medium-sized or large ones.

In this paper, we evaluate what we have learned to date about the effects of privatization from the experiences during the last fifteen to twenty years in the postcommunist (transition) economies and, where relevant, China. We distinguish separately the impact of privatization on efficiency, profitability, revenues, and other indicators and distinguish between studies on the basis of their econometric methodology in order to focus attention on more credible results. The effect of privatization is mostly positive in Central Europe, but quantitatively smaller than that to foreign owners and greater in the later than earlier transition period. In the Commonwealth of Independent States, privatization to foreign owners yields a positive or insignificant effect while privatization to domestic owners generates a negative or insignificant effect. The available papers on China find diverse results, with the effect of nonstate ownership on total factor productivity being mostly positive but sometimes insignificant or negative.