Abstract

The drive for privatisation and liberalisation is still on the increase. However, the literature on contracts points out that using prices to provide incentives is quite a crucial issue. Asymmetric information prevents markets from working efficiently. Indeed, the origins of state failures do not differ from those of market failures. Support for privatisation and liberalisation should be argued on a case by case basis, and not on general assertions. A certain attention for public intervention and the implementation of the appropriate social and institutional framework should not be abandoned.