Abstract
There has been a sea change in attitudes towards public enterprise around the world in recent years. In Western Europe, the United Kingdom and, since April 1986, France have set out to privatize public enterprises on a large scale. In the case of France, this represents not only a reversal of the nationalizations undertaken by the previous socialist government in 1981, but companies nationalized in 1945 are also being privatized.
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Notes
The data include mining and manufacturing. M. A. Ayub and S. O. Hegstad, ‘Public Industrial Enterprises. Determinants of Performance,’ Industry and Finance Series, Volume 17 (Washington, DC: World Bank, 1986) p. 17.
Unless otherwise noted, the data derive from R. P. Short, ‘The Role of Public Enterprise: An International Statistical Comparison,’ in R. H. Floyd, C. S. Gray, and R. P. Short (eds), Public Enterprise in Mixed Economies (Washington, DC: International Monetary Fund, 1984) pp. 110–96.
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Within the last group there was one case where public enterprise may be slightly favored. G. Yarrow, ‘Privatization in Theory and Practice,’ Economic Policy, I (1986) pp. 323–70.
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It has been reported that, after collectively purchased motor boats had been sold to fishermen, the share of boats in operating conditions rose from 15 percent to 85 percent, with corresponding increases in output. E. Berg, ‘Private Sector Potential in Africa,’ Journal of Economic Growth, I (1986) pp. 17–23.
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As suggested in the case of the United Kingdom efficiency may conceivably deteriorate rather than improve as a result. J. A. Kay and D. J. Thompson, ‘Privatization: A Policy in Search of a Rationale,’ Economic Journal, XCVI (1986) pp. 18–32.
‘To an African Government contemplating the creation of a substantial public sector as a means of promoting industrialization the advice of this writer would have to be: don’t do it; there are better ways of stimulating industrial growth. A large industrial public sector will contribute little to dynamic industrial growth, will tend to become a drain on public finances, will require a net inflow of resources to cover its capital requirements and will discourage the growth of private industry’ (T. Killick, ‘The Role of the Public Sector in the Industrialization of African Developing Countries,’ Industry and Development, no. 7 (New York: United Nations, 1983) p. 87.
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© 1989 Bela Balassa
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Balassa, B. (1989). Public Enterprise in Developing Countries: Issues of Privatization. In: New Directions in the World Economy. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-10588-5_10
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DOI: https://doi.org/10.1007/978-1-349-10588-5_10
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