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Purpose: State-owned enterprises (SOEs) are essential tools to further policy objectives across the world. However, in the past few decades, heated debates on the performance of SOEs vis-à-vis private sector enterprises have surfaced. In India, SOEs have long played an important role in the economy and only recently have undergone the trend of privatization. The purpose of this paper is to analyze existing research and to conclude whether private enterprises perform better than SOEs. Design/methodology/approach: A review of available literature on performance comparisons of public and private sector enterprises is carried out, and differences between public and private enterprises are studied. Finally, theoretical propositions on the differences in objectives of public and private enterprises in the Indian context are enumerated. Three propositions are tested using data on Indian SOEs available in the public domain. Findings: Performance comparisons of public and private enterprises have focused merely on technical productivity or financial aspects and have thus left out the wide scope of social, economic and political objectives of SOEs. Literature on the nature of SOEs indicates that there are certain fundamental differences in the objectives of public and private sector enterprises. Further, the basic theoretical assumptions tested have been found to be, prima facie, valid in the Indian context. The paper thus establishes a case for further research to develop a comprehensive technique for the comparison of public and private sector enterprises in the Indian context. Originality/value: Extant research on the subject of comparing public and private entries has limited itself to technoeconomic considerations and has not taken into account the different objectives/nature of these enterprises. The study established a case for diverging from the present discourse privatization and private sector supremacy. The same could have far-reaching consequences for policymakers, especially in developing countries. [ABSTRACT FROM AUTHOR]

The article explores the relationship between the government and the private sector in the United States in 1967. The author feels that the term "private sector" is overly broad since it can refer to businesses ranging from local retailers to government-funded defense contractors as well as government-regulated utility companies. He calls for the privatization of government corporations as a more effective way to streamline certain businesses that are creatively stagnant. He also suggests that welfare reform and social policies such as federally financed medical care offer great hopes for a better society.

The article discusses reformation of State-Owned Enterprises (SOEs) in South Korea, Laos, and Vietnam as well as SOEs being accepted by the Asian government and international financial institutions leads to privatization. Topics discussed include SOEs being sold off to private sectors; increase in diverse forms of public-private partnerships; and privatization of Korea Electric Power Corporation.

Many countries have privatized part of their state holding corporations in recent years. However, the literature on this issue has analyzed mainly the privatization of uniproduct public firms. We consider a state holding corporation with two plants that may produce complement or substitute goods. Assuming that private firms are more efficient than the state holding corporation we find the following: If the marginal cost of the state corporation is low, it is not privatized either if goods are substitutes or if they are complements. However, if the marginal cost of the state corporation is high the two plants of the state holding corporation are sold to a single private investor if goods are complements, and to different investors if goods are substitutes. If goods are close substitutes and the marginal cost of the state corporation takes an intermediate value only one plant is privatized. We extend the model to consider that firms are equally efficient, that they face quadratic cost functions and that there are n uniplant private firms producing each good. We find two differences with the previous result: The government never privatizes just one plant of the state corporation, and when goods are complements the two plants of the state corporation are sold to different investors if n is high. [ABSTRACT FROM AUTHOR]

ABSTRACT For several decades public enterprises have been criticized for their poor economic performance. Many economists take it as 'conventional wisdom' that publicly owned enterprises are inefficient by their very nature. This seemed to be proved by what is probably the most cited survey worldwide, that written by Megginson and Netter (2001). They claim: 'Research now supports the proposition that privately owned firms are more efficient and more profitable than otherwise-comparable state-owned firms' (p. 380). We argue that profits are not a reasonable performance measure for public enterprises. However, our main focus is to present a much more comprehensive review of the empirical evidence, including more recent research than was provided by Megginson and Netter. The evidence indicates that these authors were biased in their selection of empirical studies and their conclusion as well. Firstly, the true picture is much more differentiated than Megginson and Netter suggest. Secondly, with regard to productivity and production cost, there is no support for the claim that private enterprises have better performance ceteris paribus than public enterprises. [ABSTRACT FROM AUTHOR]

An essay is presented on privatisation, the change of ownership rights from government-owned enterprises to private sector, which is considered controversial despite its success. It explores the criticisms of privatisation, theoretical arguments favoring state-owned enterprise, and the significance of fiscal constitution.

This paper evaluates the impact of privatization on firm employment using a panel dataset of 386 firms in China in the period 1995-2001. Our panel regressions find that employment drops more slowly in privatized firms than in pure state-owned firms by a margin of 17.7 percentage points over the base year of 1995. We also study the dynamic impacts of privatization on employment growth and find that the performance of privatized firms improves over time. Using the difference-in-difference propensity score matching method, we arrive at similar results. To test the robustness of our conclusions, we use alternative definitions of privatization and find that the impacts of privatization on employment are independent of the definition of privatization. These findings are robust even after we control other performance and financial variables as well as the pre-privatization employment history of privatized firms. [ABSTRACT FROM AUTHOR]

We determine optimal privatization in a symmetric differentiated duopoly when the public firms do not bear the full cost of production and hence their objective functions differ from the government’s objective function. In the social optimum firms will generally have mixed ownership, and it will depend on the type of uncovered cost, the degree of substitutability of the two products and the output decision rule of the partially public firms. Different types of mixed duopoly emerge, ranging from both firms being partially privatized, to one being fully privatized. We also derive an optimal tax-subsidy scheme as a substitute for privatization. [ABSTRACT FROM AUTHOR]

Reform in China’s urban public sector has been so contentious that the nature, function, validity and viability of state firms require clarifications. First of a two-part critique, this essay assesses the outcomes and wider consequences of China’s largely free wheeling process of privatization as compared to the rationale claimed for its instigation. By identifying the ideological and political forces behind that process, the essay further seeks to explain the erosion of public policy capacities pivotal for social defence in market globalization, thereby demonstrating the need to reorient the reform. Losing the opportunity to reinvigorate a sizable and strong state sector capable of healthy interactions with other sectors is shown to be especially damaging in developing and transitional societies, which in turn negatively impacts both global economy and ecology. [ABSTRACT FROM AUTHOR]

This paper will argue that the continued existence of state-owned enterprises (SOE) soft budget constraints, while adversely affecting SOE performance, reflects wider problems in the regulation of Chinese industry. As such, simple recourse to privatisation will not address the deep structural factors, such as over-politicisation and under-regulation of the private sector, which affect SOE performance. Section I of the paper will discuss the "direct" effects of soft budget constraints on SOE performance in China. Section II will address the "indirect effects" of soft budget constraints through their effects on the competitive environment vis-a-vis private sector firms. Section III will address the issue of privatisation and discuss the broader factors which affect both the extension of soft budget constraints and low SOE performance. [ABSTRACT FROM AUTHOR]

In the context of ongoing scandals about public versus private ownership, we review the rise and fall of British nationalised industries, and the subsequent rise of privatisation based on perception of market-based efficiency as a means of improving public service. We evaluate the theoretical and empirical arguments around privatisation and find that the argument of privatisation as a vehicle for efficiency gains is a myth. Instead, we suggest that efficiency is not solely a matter of ownership, but requires a complex interplay of social and commercial variables to make it possible. We call for a more inventive and flexible approach in the search for efficiency in the public sector. [ABSTRACT FROM AUTHOR]

Agency and public choice theories, though commonly used, can only provide a static approach to the study of privatization and often neglect the cultural, contextual and organizational settings of the enterprises affected by privatization. The authors present a new model which can be used to understand the organizational processes involved in a successful privatization. This article analyses the academic literature on privatization, describes the cases of two privatized Swedish companies and then offers suggestions for further research. [ABSTRACT FROM AUTHOR]

This article attempts to examine some of the concerns and challenges of privatization as a strategy for rethinking government economic intervention in the economy and for rebalancing public/private sector relationships. Specifically, this article focuses on the case of sub-Saharan Africa. The article examines the concept of privatization in terms of its objectives and explores its theoretical framework and underlying assumptions. The nature of growth of state-owned enterprises in sub-Saharan Africa is also examined. The article also explores some factors that aided the growth, and the performance of these enterprises.

China's state-owned enterprises (SOEs) have achieved significant growth and productivity gains without privatization. Despite that, the regime has since late 1993 been forced to put privatization on the agenda, a development that has reached an important milestone at the Parry's 15th Congress of September 1997 and since. At the same time, the private sector has grown phenomenally, controlling close to half of the national economy in many respects by now. The regime has not only been ready to let private capital lake over small SOEs, but has been desperate to woo private capital for capital injection into even the largest SOEs. While the regime hopes to retain control of these latter SOEs despite private equity participation, a very real possibility exists for the process to run out of the regime's control. [ABSTRACT FROM AUTHOR]

This paper identifies major areas related to the privatization of state owned enterprises in Latin America that could very well be applied to other regions of the world, as more countries try to allow the private sector to play a larger role in theft economies. [ABSTRACT FROM AUTHOR]

The article reports that in 1987, U.S. President Ronald Reagan appointed a bipartisan President's Commission on Privatization to examine all activities and programs of the national government, to determine which belonged in the private sector, and to recommend changes. After six months of intensive study, the Commission issued its 278-page report, "Privatization: Toward More Effective Government." Briefly, the Commission enunciated its three basic principles, first government should not be in the business of business, namely the production of goods and services. Second is the government should bring in the creative talents and drive of entrepreneurs and executives from the private sector so they can help solve the major problems of today. The third is consumers who require government services should be given a choice, and not be captive to the particular agencies to which they happen to be assigned, the public school, medical clinic, or housing project.

The Argentine national oil company. YPF, was drastically restructured and sold to the public in an initial public offering during the early 1990s. This process of privatization was the most successful large-scale one in Argentina during the period, and it serves as a useful benchmark for other privatizations in other countries and contexts. The most important internal strategic factors that contributed to the success of this privatization were: (1) the redefinition of core businesses and elimination of non-core activities; (2) the restructuring of the organization and personnel to fit the core business; and (3) the positioning of the firm for sale to private-sector investors. The most important external factors that contributed to the success of this privatization were: (1) the government's firm and clear position on the issue, and the creation of a legal framework to permit privatization of YPF and deregulation of the industry: and (2) the identification of key pressure groups and defusing of their efforts to oppose the privatization. [ABSTRACT FROM AUTHOR]

The article presents a discussion on privatization of public enterprises in Jamaica and post-colonial countries. It describes the dependency of Third World countries on developed states and examines the relationship between their non-development and colonialism. The article focuses on the case of Jamaica and its efforts at privatization to gain insight into the reasons for the dominance of public enterprises in post-colonial states. It discusses the evolution of post-colonial societies and the role of nationalistic ideologies in the privatization of public enterprises.

Recent expansions in privatization of government programs mean that the constitutional paradigm of a sharp separation between public and private is increasingly at odds with the blurred public-private character of modern governance. The article argues that current state action doctrine is fundamentally inadequate to address the constitutional challenge presented by privatization. The article proposes a new constitutional analysis of privatization that reformulates state action in private delegation terms.

This article reports that Algeria has suspended the first ever bank privatization in the North Africa nation bacause of continuing troubles in global financial markets. It discusses that several business deals have come unhinged as the cost of borrowing money has risen due to problems in the U.S. housing market. Algeria was planning to auction off 51 percent of Credit Populaire d'Algerie and the Finance Ministry said that the sale would resume when the impact of the mortgage crisis became clearer.

The article reports that Algeria's Prime Minister Abdelaziz Belkhadem announced the privatization of thirty percent of the Local Development Bank (BDL) as part of an effort to reorganize the loss-making government corporations and government business enterprises. Groups of American, Spanish, and French investors expressed interest in the privatization of 51 percent of the Credit Populaire d'Algérie (CPA) savings bank. Foreign banks might be discouraged from participating in the Local Development Bank privatization because of unexplained delays in previous privatization projects.