Economic Integration and Privatization of Publicly-owned Firms

Abstract

[EN] We analyse in this paper whether it should be the government of each country that decides whether to privatise a publicly-owned firm (non integration) or whether a supra-national authority should decide whether publicly-owned companies in the different countries should be privatised (economic integration). We assume that there are two countries which form a single market in which there is free trade and each country has one publicly-owned company and n private companies. We show that the aggregate social welfare is greater if there is a supra-national authority which decides whether or not privatise publicly-owned companies. Moreover, we obtain that it is better that the publicly-owned companies be owned by the countries in which they are located instead of that these firms be owned by the supranational authority.

[ES] En este artículo analizamos si, desde el punto de vista del bienestar social agregado de los países, es mejor que sea el gobierno de cada país quien decida si privatiza sus empresas públicas (que no haya integración) o si es preferible delegar dicha decisión en una autoridad supranacional (integración económica). Considerando dos países que forman un mercado único en el que existe libre comercio, obtenemos que es preferible delegar la decisión de privatización de las empresas públicas en una autoridad supranacional. Además, es mejor que las empresas públicas sean propiedad de los países en que se localizan a que pasen a ser propiedad de la autoridad supranacional.