Entrepreneurship and privatization in Central Europe: The tenuous balance between destruction and creation

What is the best set of privatization policies to release entrepreneurial e ndeavors in transition economies? Policies of mass privatization in Central Europe were predicated on the belief that private ownership through securi tization of property rights would provide powerful incentives for efficient restructuring. In retrospect, the more radical privatization programs not only failed to achieve the expected restructuring but also hindered the dev elopment of entrepreneurial activities. In this article we develop four pro positions, arguing that entrepreneurship is better fostered through gradual ist policies permitting negotiated solutions to restructuring, as opposed t o market-driven reforms.