ABSTRACT
This article discusses the influence of the ownership structure over the efficiency. The framework used is the incentive theory, in which the principal must build an incentive scheme, which induces an agent to act optimally. First, we verify the reasons for public intervention in industries with market failure. Following, we study the deterioration of the incentive structure over managers as a result of the ownership change. So, we verify how the structure of incentives can be restored with the firm’s privatization, with the maintenance, by the government, of some control over the firm. Finally, we make a brief exposition about the regulatory instruments.
KEYWORDS:
Privatization; theory of incentives; principal-agent model; market failures; property