From Government to Regulatory Governance: Privatization and the Residual Role of the State
AbstractThis paper reviews the state of thinking on the governance role of public ownership and control. We argue that the transfer of operational control over productive assets to the private sector represents the most desirable governance, due to the inherent difficulty for citizens to constrain political abuse relative to the ability of governments to regulate private activity. However in weak institutional environments the process needs to be structured so as to avoid capture of the regulatory process. The speed of transfer should be timed on the progress in developing a strong regulatory governance system, to which certain residual rights of intervention must be vested. After all, what are “institutions” if not governance mechanisms with some degree of autonomy from both political and private interests? The gradual creation of institutions partially autonomous from political power must become central to the development of an optimal mode of regulatory governance. We advance some suggestions about creating accountability in regulatory governance, in particular creating an internal control system based on a rotating board representative of users, producers and civil society, to be elected by a process involving frequent reporting and disclosure.
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Bibliographic InfoPaper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2005.151.
Date of creation: Dec 2005
Date of revision:
Regulatory Governance; Privatization;
Find related papers by JEL classification:
- G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
- L53 - Industrial Organization - - Regulation and Industrial Policy - - - Enterprise Policy
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- Nasrollahi Shahri, Nima, 2011. "Power market reforms and privatization of the electricity industry in the Iranian energy sector; an uphill struggle?," MPRA Paper 28047, University Library of Munich, Germany.
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