Some Considerations in the Performance Evaluation of State-Operated Enterprises

Benjamin Diokno
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Benjamin Diokno: School of Economics, University of the Philippines Diliman

No 198515, UP School of Economics Discussion Papers from University of the Philippines School of Economics

Abstract: This paper describes a framework for evaluating the financial performance of state-operated enterprise (SOEs). The proposed framework maintains the distinction between commercial enterprises and service-oriented enterprises. In the first case, the sponsoring government is assumed to be concerned with the financial profitability of the enterprise; in the second case, the concern is with the provision of service at reasonable cost-recovery levels. It argues that the financial performance of the enterprise may be attributable to both exogenous market factors and constraints that are controllable through public policy, and that one of the objectives of any performance appraisal should be to identify these barriers to profitability or cost-recovery.

Date: 1985-12
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Published as UPSE Discussion Paper No. 1985-15, December 1985

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