In Privatisation: The lesson of Experience the authors Sunita Kikeri, John Nellis & Mary Shirley, officials of the World Bank, make the point that governments intent on privatising face a challenge: the benefits of efficiency and innovation only materialize if privatisation is done correctly. The following checklist provides some basic guidelines.

The more market-friendly a country's policy framework - and appropriate policy is corrected with capacity to regulate- the less difficulty it will have in privatising on Sate Owned Enterprises (SOE), and the higher the likelihood that the sale will turn out positively.

SOEs functioning in competitive markets, or in markets, or in markets easily made competitive, are prime candidates for privatisation. Their sale is simple compared with that of public monopolies, and they require little or no regulation.

An appropriate regulatory framework must be in place before monopolies are privatised. Failure to regulate properly can hurt consumers and reduce public support for privatisation.

Countries can benefit from privatising management through management contracts, leases, contracting out, or concessions.

The primary objective of privatisation should be to increase efficiency not to maximize revenue (for example, by selling into protected markets) or even to distribute ownership widely at the expense of managerial efficiency.

Rather than restrict the market by excluding foreign investors and favouring certain ethnic groups, governments should experiment with "golden shares" (devices that prevent complete takeover by non-government interests without retaining management control by government) and partial share offerings. These could help to win acceptance for foreign and other buyers.

Avoid large new investments in privatisation candidates; the risks usually outweigh the rewards. Rather prepare for sale by carrying our legal, managerial and organisational changes.

Experiences shows that labour does not, and need not, lose in privatisation, if governments pay attention to easing the social cost of unemployment through adequate severance pay, unemployment benefits, retraining and job search assistance.

Ideally, let the market set the price, and sell for cash. Realistically, though, negotiated settlements and financing arrangements or debt-equity swaps may b e unavoidable.

In all privatisations, in all countries, the transaction must be transparent.