During the past 15 years, the privatization of government services and state-owned enterprises has gained remarkable currency as a means of enhancing global competitiveness, fostering the establishment of democratic institutions and advancing economic development. In 1996 alone, privatization programs raised an estimated $85 billion worldwide and increased citizens' participation as shareholders in domestic and global economies.

U.S. support for privatization has been two-fold: In addition to providing bilateral aid, the United States works closely with the development banks that have played a leading role in the recent wave of privatizations.

This issue of Economic Perspectives explores the process of privatization, its problems, and its benefits -- with special emphasis on the developing and transitional economies that have produced some of the most creative and far-reaching programs to date.