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Public enterprise in the modern western world: an historical analysis

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  • Robert MILLWARD


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    The aim of this paper is to explain the pattern of public enterprise in Western Europe, Japan and USA in the late 20th century, just before the onset of privatisation. It is argued that this requires an understanding of the origins which date from the early 19th century. The task then becomes one of explaining differences over time and across countries. The focus is on those enterprises levying prices and required to break even financially. A common misconception is that the establishment of such public enterprises at both the state and municipal level was a device for overcoming problems of natural monopoly and/or a socialist instrument for mitigating worker exploitation. It is argued that the former was mainly dealt with by arms’ length regulation and that socialist forces were limited. The key questions that have to be answered and around which the paper is organised are: why was public enterprise common in grid networks; why were state owned enterprises in manufacturing more common in Germany, Spain, Italy; why were USA and UK (up to 1939) different; was municipal and state socialism important; what does the privatisation experience tell us about public enterprise; what do performance studies reveal? The answer is that public enterprise was often an instrument for promoting social and political unification, securing national defence and related strategic considerations, increasingly in the 20th century for promoting economic growth, with regulatory failures and socialist pressures playing a more subsidiary and/or occasional role.

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    Paper provided by Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano in its series Departmental Working Papers with number 2010-26.

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    Date of creation: 23 Aug 2010
    Handle: RePEc:mil:wpdepa:2010-26
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    1. Domberger, Simon & Piggott, John, 1986. "Privatization Policies and Public Enterprise: A Survey," The Economic Record, The Economic Society of Australia, vol. 62(177), pages 145-162, June.
    2. Jules Moch, 1938. "Thoughts On The Nationalization Of Enterprises," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 14(2), pages 308-327, 07.
    3. Wallsten, Scott, 2005. "Returning to Victorian Competition, Ownership, and Regulation: An Empirical Study of European Telecommunications at the Turn of the Twentieth Century," The Journal of Economic History, Cambridge University Press, vol. 65(03), pages 693-722, September.
    4. Headrick, Daniel R. & Griset, Pascal, 2001. "Submarine Telegraph Cables: Business and Politics, 1838–1939," Business History Review, Cambridge University Press, vol. 75(03), pages 543-578, September.
    5. Mary O’Mahony & Michela Vecchi, 2001. "The Electricity Supply Industry: A Study of an Industry in Transition," National Institute Economic Review, National Institute of Economic and Social Research, vol. 177(1), pages 85-99, July.
    6. Foreman-Peck, James & Millward, Robert, 1994. "Public and Private Ownership of British Industry 1820-1990," OUP Catalogue, Oxford University Press, number 9780198203599.
    7. Robert Millward, 2006. "Business and government in electricity network integration in Western Europe, c.1900-1950," Business History, Taylor & Francis Journals, vol. 48(4), pages 479-500.
    8. Borchardt,Knut, 1991. "Perspectives on Modern German Economic History and Policy," Cambridge Books, Cambridge University Press, number 9780521363105, December.
    9. Bogart, Dan, 2009. "Nationalizations and the Development of Transport Systems: Cross-Country Evidence from Railroad Networks, 1860–1912," The Journal of Economic History, Cambridge University Press, vol. 69(01), pages 202-237, March.
    10. Anchordoguy, Marie, 2001. "Nippon Telegraph and Telephone Company (NTT) and the Building of a Telecommunications Industry in Japan," Business History Review, Cambridge University Press, vol. 75(03), pages 507-541, September.
    11. 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.
    12. Robert Millward, 2011. "The Institutional Economic History of Infrastructure Industries, 1830–1990: Ideology, Technology, Geopolitics?," Chapters,in: International Handbook of Network Industries, chapter 6 Edward Elgar Publishing.
    13. Borchardt,Knut, 1991. "Perspectives on Modern German Economic History and Policy," Cambridge Books, Cambridge University Press, number 9780521368582, December.
    14. Dunham, Arthur L., 1941. "How the First French Railways Were Planned," The Journal of Economic History, Cambridge University Press, vol. 1(01), pages 12-25, May.
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