t

This paper seeks to clarify what factors contributed to the macroeconomic gains and losses from privatization in transition economies over the past decade. In contrast to the original “Washington Consensus, ” which had a tendency to equate change-of-title with privatization, we find that economic performance gains come only from “deep ” privatization, that is, when change-of-title reforms occur once key institutional and “agency”-related reforms have exceeded certain threshold levels. We also find that as a result of different initial conditions the economic performance responses of countries to the same policies are different. [JEL: G38, L33, O11, P31, and P37] This paper is the third in a series1 that evaluates the first decade of economicreform in transition economies. Based on indicators developed in Sachs, Zinnes, and Eilat (2000a), the present paper contributes to the already large 14