Public enterprises, planning and policy adoption: three welfare propositions

Chiara Del Bo and Massimo Florio

Journal of Economic Policy Reform, 2012, vol. 15, issue 4, 263-279

Abstract: Despite widespread privatizations over the last three decades, public enterprises, as production units under government control, are still present in several countries and sectors. While the academic and political debate on the costs and benefits of privatization is vast, a focus on the rationale for public enterprises, from the standpoint of Social Cost Benefit Analysis, is missing. This paper aims at filling this gap and provides a normative discussion on public enterprises in a general equilibrium setting. The conditions under which public provision may be beneficial and the metrics for evaluating polices and projects under (a)symmetric information and (non)benevolent governments are presented in three welfare propositions. The main policy message points to the overall quality of institutions as a necessary pre-condition for socially desirable public enterprises. A sound institutional environment provides policy-makers with the correct incentives to design and implement meaningful policies even if public administrators adopt sub-optimal plans. Institutions should constrain self-interested policy-makers from disrupting the key welfare signals for policy adoption as well as for project appraisal, while bias in management is a relatively less important concern.

Date: 2012
References: Add references at CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
http://hdl.handle.net/10.1080/17487870.2012.722846 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:jecprf:v:15:y:2012:i:4:p:263-279

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/GPRE20

DOI: 10.1080/17487870.2012.722846

Access Statistics for this article

Journal of Economic Policy Reform is currently edited by Dr Judith Clifton

More articles in Journal of Economic Policy Reform from Taylor and Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().