| The study focuses on enterprises in the post-Soviet economies of Lithuania and Latvia, and asks: which ownership/control structure is most efficient; which is most equitable; and what efficiency-equity tradeoffs exist for the various ownership/control structures? From September 1996 to June 1997, enterprises were randomly selected from the top five industries in each country and surveyed, culminating in 73 completed questionnaires. The 73 enterprises were divided into nine ownership/control structure categories, according to three types of ownership (public, private and mixed) and three control orientations (owners, managers and owners/managers). Indicators, chosen from the questionnaire, were used to calculate Efficiency and Equity Indices that served as dependent variables for multivariate regression. The original expectations, prior to field research, predicted that the public/managers structure would be most efficient and most equitable, given the enterprises' familiarity with the structure during the Soviet period. These expectations formed the ‘original hypotheses’ for regression, which included location, industry and size of enterprise as control variables. Based on the research data, however, ‘revised hypotheses’ were derived. Empirically, the mixed/owners structure proved most efficient for Lithuania, while the private/owners structure proved most efficient for the whole and Latvian samples. For equity, which was defined as ownership/wealth (privatization), income distribution, capabilities and conditions within enterprises, the private/owners structure proved most equitable for all three samples. Given these results, a neoclassical structure, with some private ownership, would seem to promote greater efficiency and equity. However, the study acknowledges the shortcomings of neoclassical economics as well as socialism (and its variants) and recommends dynamic market theory and ‘institutional economics’ as the best framework. The small/medium size of the surveyed enterprises is no doubt a key factor for the study's results. Another unique finding is the greater efficiency of the mixed/owners category for Lithuania, which supports the notion that full privatization alone does not lead to greater efficiency. The theories and empirical studies suggest that an economic system that allows for multiple forms of ownership and control, including the greater participation of employees, supported by a stable, but flexible, institutional framework that supports property rights, competition, entrepreneurship and innovation is the best policy. |
