Page 7 - Azerbaijan State University of Economics
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THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.71, # 1, 2014, pp. 4-25
With a view to increase incomes from privatization to the state budget, demonopolization
may be prolonged or accelerated. Whole demonopolization will expectedly increase state
incomes as a result of privatization. At this time, covering of increase in state incomes by that of
real social payments stipulated by transition from monopoly to competition, is a significant
economic phenomenon [David.J.Teece 1998]. If demonopolization occurs after privatization,
property candidates will reduce their requirements and intended demonopolization conditions in
connection with uncertainties. When intended demonopolization conditions are not completely
clear during privatization, this makes uncertainties more complicated and shakes new
proprietors’ belief in development of competition.
It’d be better to strive for development of the competition through demonopolization rather
than offering an opportunity for economic structures inherited by stagnation years, under the
market economy circumstances where there are no dynamics and operating for a certain time
within the market economy. As a result, a careful policy pursued for consolidation of companies
after the market economy starts to work, may lessen some faults in demonopolization.
Role and determination of limited markets
No matter which term is used, any study related to demonopolization is based on a limited
market definition. For instance, no one can ever imagine that, presence of a great number of
vegetable sellers would entail fragmentation of a sole enterprise on manufacturing and sale of
bicycles; or existence of many food stores on a radius of 200 km may lead to fragmentation of an
only one in a small town; or an only food store in the southern part of a small town should be
broken up due to existence of many such ones across 1 kilometre to the north. When translated
into the language of limited market these examples show that, vegetables are not included in
limited market of bicycles, and limited market of food stores is sufficiently localized to cover
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