How poorly governed state-run businesses can ruin the economy and politics

Dag Detter and Stefan Fölster

Chapter Chapter 3 in The Public Wealth of Nations, 2015, pp 30-42 from Palgrave Macmillan

Abstract: Abstract It would be natural to think that large public wealth helps a government to steer a country well. Paradoxically, the opposite seems to be the case. Just as a country may suffer from the “Dutch disease” when blessed with an abundance of natural resources, public wealth can have toxic side effects. A “public wealth malaise” is hardly caused by incompetence among politicians, even if some businesspeople like to think so. The disease transcends how well the state-owned firms are managed. Rather, the public wealth malaise comes about because the administration of public wealth seriously distracts politicians from their primary task and, indeed, mandate — to promote the common good. In fact, more public wealth weakens governments and democratic decision making.

Keywords: Chinese Communist Party; Supervisory Board; Dutch Disease; Tennessee Valley Authority; Private Prison (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-137-51986-3_3

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DOI: 10.1057/9781137519863_3

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