Book contents
- Frontmatter
- Contents
- Series editors' preface
- Acknowledgments
- 1 Introduction
- 2 Basic theory and method: A transactions cost approach
- 3 Regulatory institutions
- 4 Bureaus and the budget
- 5 Bureaus and the civil service
- 6 Public versus private enterprise
- 7 Public enterprise versus public bureau
- 8 Conclusion
- Appendixes
- Notes
- Bibliography
- Author index
- Subject index
6 - Public versus private enterprise
Published online by Cambridge University Press: 28 October 2009
- Frontmatter
- Contents
- Series editors' preface
- Acknowledgments
- 1 Introduction
- 2 Basic theory and method: A transactions cost approach
- 3 Regulatory institutions
- 4 Bureaus and the budget
- 5 Bureaus and the civil service
- 6 Public versus private enterprise
- 7 Public enterprise versus public bureau
- 8 Conclusion
- Appendixes
- Notes
- Bibliography
- Author index
- Subject index
Summary
While the production of goods and services for sale is typically the preserve of the private sector, most countries use state-owned firms to some degree. The appropriate boundary between public and private ownership is often the center of intense political debate, most recently over privatization. The experience with privatization demonstrates that legislators make very deliberate choices in setting this public–private boundary. The controversy that often surrounds privatization and nationalization suggests that ownership matters – indeed, that much is at stake.
It is very difficult to construct a simple explanation for SOEs that captures the great diversity of situations where legislators in different countries, and at different times, have chosen public over private enterprise. Despite this diversity, however, there are some striking empirical regularities. In particular, public enterprises are concentrated in the same sectors – like postal services, railways, telecommunications, electricity, gas, and airlines – across many different countries. There has also been a worldwide move toward privatization since 1980 that stands in marked contrast to the postwar growth in state-owned enterprise. These regularities suggest that not only is the choice of public ownership very deliberate, but also that many of the factors that are important in determining this choice are common to a large number of countries. Country-specific factors may be important in certain circumstances, or at certain times, but any explanation of these regularities has to apply to countries with very different histories, cultures, and ideologies.
- Type
- Chapter
- Information
- The Political Economy of Public AdministrationInstitutional Choice in the Public Sector, pp. 134 - 169Publisher: Cambridge University PressPrint publication year: 1995