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Experiments in privatizing enterprises in transition economies abound, from extensive efforts at sales to strategic owners (as in Estonia and Hungary), to programs based primarily on insider buyouts (as in Russia and Slovenia), to innovative mass privatization programs involving the creation of large and powerful new financial intermediaries (as in the Czech and Slovak republics and Poland). Each approach has inherent strengths and risks. But if the objectives are to sever the links between the state and the enterprises, to school the population in market basics, and to foster further ownership change, the initial weight of evidence seems to favor significant reliance on voucher privatization, especially given the difficulty most countries have finding willing cash investors. S ocialism's defining characteristic was state ownership of all productive assets. Moving from state to private ownership and creating the conditions to improve the performance of medium-size and large enterprises are the main tasks of the transition from socialism. But privatization goes beyond a change in ownership. Programs to privatize enterprises in transition economies should be evaluated in terms of three broad dimensions: the corporate governance mechanisms they create, the supporting institutions they foster, and the extent to which they create a self-sustaining economic and political reform process. Although some governments judge revenues to be an important goal of privatization, they are at best a secondary objective. The initial patterns of ownership resulting from any program of enterprise privatization are unlikely to be optimal. They may be too dispersed, or they may be concentrated in the hands of entities unable or unwilling to use such resources efficiently. The long-run success of any privatization program therefore depends on the capacity for ownership patterns to change and evolve

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