In Russia, there wasn't political will or administrative capacity to force privatization on unwilling managers. The political solution was to bribe them with enough cheap shares so that they would pursue privatization voluntarily. Employees were given large numbers of cheap shares. The result was that most privatized firms were majority owned by workers and managers. This ownership structure led to virtually complete manager control of most enterprises. The managers’ personal stake in their companies was often modest to begin with, but rose quickly. In Russia vouchers were publicly tradeable. This fostereda liquid voucher market, which let some citizens cash out Read the text and think of the various ways the insiders could discourage others from bidding at the voucher auctions., and made it easy for managers to buy vouchers that could be traded for shares in their own companies. Managers often got the funds to buy vouchers by illegally “privatizing” company funds. They continued to accumulate control after the voucher auctions were completed, by convincing orcoercing employees to sell their shares. Some voucher auctions were marked by other irregularities, beyond the managers’ illegal use of company funds to acquire vouchers. The auction design meant that the fewer vouchers were bid for a particular company's shares, the more shares would be distributed per voucher. This gave insiders an incentive Read the text and think of the various ways the insiders could discourage others from bidding at the voucher auctions. to discourage others from bidding at the voucher auctions. The larger the company, the more likely its managers were to use different tactics to discourage other bidders. Finally, perhaps 1,000 of the 15,000 mass-privatized firms were able to cut special deals with the government of various sorts. Again, the larger the company, the more likely its managers were to have the political clout to obtain special treatment. Finally, many of the largest enterprises were held out of voucher privatization. In several important industries, the government then bundled its controlling stakes in a number of major companies into a smaller number of Read the text and think of the various ways the insiders could discourage others from bidding at the voucher auctions. holding companies, and sold controlling stakes in the holding companies. The government created seven large oil holding companies: LUKoil, Sidanko, Sibneft, Rosneft, Tyumen Oil, Yukos, and VNK (Eastern Oil Company), which each held stakes in several producing companies, and together owned most of Russia's oil reserves. Privatization of electric power companies (with United Energy Systems as the principal holding company) and telephone companies (with Svyazinvest as the principal holding company) followed a similar pattern.