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The role played by public enterprises: how much does it differ across countries?

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  • James A. Schmitz

Abstract

This article studies the extent to which governments produce goods for the market (that is, the extent of public enterprise production). It concludes that the current literature dramatically understates the role of public enterprises in many low-productivity countries. The current literature focuses on the total value of goods produced by public enterprises. This article focuses on the types of goods they produce. While the total value of goods produced by public enterprises (as a share of total output) differs a bit across countries, the types of goods they produce differ much more dramatically. In many low-productivity countries, the government produces a large share of the country's manufactured goods. In nearly all high-productivity countries, the government stays out of the manufacturing sector altogether. Therefore?and because the manufacturing sector plays a special role in economies?this article concludes that public enterprises play a very large role in many low-productivity countries.

Suggested Citation

  • James A. Schmitz, 1996. "The role played by public enterprises: how much does it differ across countries?," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 20(Spr), pages 2-15.
    • Handle: RePEc:fip:fedmqr:y:1996:i:spr:p:2-15:n:v.20no.2
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    References listed on IDEAS

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    5. John Vickers & George Yarrow, 1988. "Privatization: An Economic Analysis," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262720116, December.
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    Cited by:

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    2. Klenow, Peter J. & Rodriguez-Clare, Andres, 1997. "Economic growth: A review essay," Journal of Monetary Economics, Elsevier, vol. 40(3), pages 597-617, December.
    3. Jeffry M. Netter & William L. Megginson, 2001. "From State to Market: A Survey of Empirical Studies on Privatization," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 321-389, June.
    4. Stela Cani, 2009. "Resource Abundance, Mineral Funds and Institutional Quality," Economics Discussion Papers em-dp2009-04, Department of Economics, University of Reading.
    5. Henrik Barslund Fosse & Pascalis Raimondos‐Møller, 2012. "Reducing Tariffs According to WTO Accession Rules: The Case of Vietnam," Review of Development Economics, Wiley Blackwell, vol. 16(2), pages 331-341, May.
    6. Ghosh, Madanmohan & Whalley, John, 2008. "State owned enterprises, shirking and trade liberalization," Economic Modelling, Elsevier, vol. 25(6), pages 1206-1215, November.
    7. SchmitzJr, James A., 2001. "Government production of investment goods and aggregate labor productivity," Journal of Monetary Economics, Elsevier, vol. 47(1), pages 163-187, February.
    8. Fernando, DEL RIO, 2004. "Investment Rate vs Relative price of Investment," LIDAM Discussion Papers IRES 2004010, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).

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