Year: 2013
Type: report
Abstract: The overarching question for the government owners of state-owned enterprises (SOEs) is why these companies need to be owned by the state.The OECD Guidelines on Corporate Governance of State-Owned Enterprises provides a "blueprint" for the corporatisation and commercialisation of such enterprises, but it may be assumed that the reason for continued state ownership is that they are expected to act differently from private companies.A relatively clear case occurs when SOEs are established with the purpose of pursuing mostly non-commercial activities.In many cases, their activities might otherwise be carried out by government institutions; the SOE incorporation has been chosen mostly on efficiency grounds.A number of other rationales for public ownership of enterprises have been offered, including: (i) monopolies in sectors where competition and market regulation is not deemed feasible or efficient; (ii) market incumbency, for instance in sectors where competition has been introduced but a state-owned operator remains responsible for public service obligations; (iii) imperfect contracts, where those public service obligations that SOEs are charged with are too complex or malleable to be laid down in service contracts; (iv) industrial policy or development strategies, where SOEs are being used to overcome obstacles to growth or correct market imperfections.This Working Paper takes stock of the rationales for public ownership of enterprises in five countries, namely Hungary, Israel, Netherlands, New Zealand and Norway.It addresses the overall ownership priorities (and "expectations") formulated by governments, the specific obligations that may be communicated to individual SOEs, the political decision processes leading to these priorities and the disclosure and accountability arrangements underpinning them.The Working Paper compares the national practices with the Guidelines and attempts to assess the implementation of the latter.Overall, the countries under review apply mostly Guidelines-consistent practices when it comes to transparency around non-commercial priorities for SOEs.However, a problem sometimes arises where companies are instructed to pursue both commercial and non-commercial priorities from within an integrated corporate platform.When it comes to practices toward measuring the implementation of non-commercial priorities, and providing compensation to SOEs for such priorities, national practices are more "uneven" and not necessarily aligned with the Guidelines.
Author: Hans Christiansen
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W2140329488