POLICY ARENA: The Economics and Politics of Government Ownership

Mary M. Shirley
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Mary M. Shirley: The World Bank, Washington DC, USA, Postal: The World Bank, Washington DC, USA

Journal of International Development, 1997, vol. 9, issue 6, 849-864

Abstract: Based in part on a new data set, this article finds that, despite an increase in privatization, state-owned enterprises (SOEs) shares in GDP and employment had not declined in developing countries, and SOE deficits and inefficiencies were a drag on growth. In a sample of 12 reforming countries, those which improved SOE performance the most followed a comprehensive strategy of divestiture, competition, hard budgets, financial sector reform and changes in the institutional relationship between SOEs and governments. These successful reformers met three necessary political conditions: reform was politically desirable, politically feasible and credible. The article presents a decision tree suggesting how to meet the three political conditions and privatize and reform SOEs. © 1997 John Wiley & Sons, Ltd.

Date: 1997
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Persistent link: https://EconPapers.repec.org/RePEc:wly:jintdv:v:9:y:1997:i:6:p:849-864

DOI: 10.1002/(SICI)1099-1328(199709)9:6<849::AID-JID488>3.0.CO;2-L

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