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POLICY ARENA: The Economics and Politics of Government Ownership

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  • Mary M. Shirley

    (The World Bank, Washington DC, USA)

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.

Suggested Citation

  • Mary M. Shirley, 1997. "POLICY ARENA: The Economics and Politics of Government Ownership," Journal of International Development, John Wiley & Sons, Ltd., vol. 9(6), pages 849-864.
    • Handle: 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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    References listed on IDEAS

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    Cited by:

    1. World Bank, 2000. "Thailand : Public Finance Review," World Bank Publications - Reports 14508, The World Bank Group.
    2. Daniele Calabrese, 2008. "Strategic Communication for Privatization, Public-Private Partnerships, and Private Participation in Infrastructure Projects," World Bank Publications - Books, The World Bank Group, number 6522, December.
    3. Börner, Kira Astrid, 2005. "Political Institutions and Incentives for Economic Reforms," Munich Dissertations in Economics 3165, University of Munich, Department of Economics.
    4. Syn, Tan Wooi, 2002. "Capital Accumulation, State Intervention and Privatisation," Centre on Regulation and Competition (CRC) Working papers 30687, University of Manchester, Institute for Development Policy and Management (IDPM).

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