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There is little doubt that privatization has become a worldwide phenomenon over the last decade and a half. During that time much has been written about why privatization has had such widespread appeal. While there are no universally accepted explanations, the poor economic and financial performance of many public enterprises and the demonstration effect resulting from cases of successful privatization have been used as convincing arguments for privatization by the International Monetary Fund and the World Bank (Berg, 1981, Kikeri, Nellis and Shirley, 1992). Explanations for the poor performance of public enterprises have been theorized from a variety of perspectives, collectively referred to as the theory of government failure. A central theme of these theories is the idea that public ownership leads to the pursuit of objectives that detract from economic welfare maximization (Willig, 1993; Boycko, Shleifer and Vishny, 1996). The combined force of the government failure literature, the principal-agent, property rights and public theories, conclude that enterprises operating under public ownership will be less efficient compared to their private sector counterparts. The principal-agent critique relies on arguments based o