EconPapers    
Economics at your fingertips  
 

Fixing State-Owned Enterprises: New Policy Solutions to Old Problems

Emilio Pineda, John Huber, Mauricio Jara, Hyungon Kim, Teresa Ter-Minassian, Rodrigo Wagner and Aldo Musacchio ()

No 9965 in IDB Publications (Books) from Inter-American Development Bank

Abstract: The situation of state-owned enterprises (SOEs) in Latin America and the Caribbean continues to be dire. This book uses an original database of SOE performance that shows that every year about one-third of such enterprises in the region report losses (up to 70 percent in some countries) and that they require between 0.3 and one percentage point of GDP in fiscal transfers to cover such losses. Countries in the region have adopted centralized agency monitoring of their SOEs, managed to reduce the fiscal burden of SOEs, shown better financial returns, and accumulated less liabilities to GDP, thus generating less fiscal risk for the government overall. Each of the chapters provides a practical way to solve either asymmetry of information problems in the monitoring of SOEs or solutions to reduce the discretionary nature of the fiscal governance of SOEs. Chapter 2 details the kinds of fiscal risks and contingent liabilities that SOEs create for governments and provides a set of controls to limit those risks. Chapter 3 shows that allowing SOEs to issue bonds has been an ineffective way of hardening their budget constraint, given that investors price those bonds at a discount. Chapter 4 presents a state-contingent financial instrument that allows investors to value an SOE. Chapter 5 provides empirical evidence on the advantages of SOE centralized monitoring agencies in Latin America and the Caribbean, highlighting Chile, Peru, and Paraguay. Chapter 6 examines the experience of East Asian countries with holding companies and discusses when holding companies are a better vehicle to control SOEs. Chapter 7 suggests ways to align the incentives of politicians and SOE managers to provide better goods and services. Finally, Chapter 8 provides a practical guide to improve the monitoring of SOEs and to design a centralized monitoring agency.

Keywords: Latin America; state-owned enterprises; privatization; state reform; corporate governance (search for similar items in EconPapers)
JEL-codes: H11 G30 H50 H77 (search for similar items in EconPapers)
Date: 2020
ISBN: 9781597823715
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://publications.iadb.org/publications/english ... _to_Old_Problems.pdf (application/pdf)

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:idb:idbbks:9965

Access Statistics for this book

More books in IDB Publications (Books) from Inter-American Development Bank Contact information at EDIRC.
Bibliographic data for series maintained by Felipe Herrera Library ().

 
Page updated 2020-07-13
Handle: RePEc:idb:idbbks:9965