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State-Owned Enterprises in Emerging Europe: The Good, the Bad, and the Ugly
Author:
Uwe Böwer
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Series:
IMF Working Papers
Volume/Issue:
Volume 2017: Issue 221
Language:
English
Publication Date:
30 Oct 2017
DOI:
https://doi.org/10.5089/9781484315163.001
ISBN:
9781484315163
ISSN:
1018-5941
Pages:
27
Keywords:
WP; SOE performance; output share; SOE governance challenge; governance reform; SOE profitability; State-Owned Enterprises; Emerging Europe Author’s; firm profitability; SOE landscape; oversight unit; ownership function; performance target; reform effort; professionalized SOE board; infrastructure sector; Public enterprises; Energy sector; Services sector; Contingent liabilities; Productivity; Europe
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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State-owned enterprises (SOEs) play an important role in Emerging Europe’s economies, notably in the energy and transport sectors. Based on a new firm-level dataset, this paper reviews the SOE landscape, assesses SOE performance across countries and vis-à-vis private firms, and evaluates recent SOE governance reform experience in 11 Emerging European countries, as well as Sweden as a benchmark. Profitability and efficiency of resource allocation of SOEs lag those of private firms in most sectors, with substantial cross-country variation. Poor SOE performance raises three main risks: large and risky contingent liabilities could stretch public finances; sizeable state ownership of banks coupled with poor governance could threaten financial stability; and negative productivity spillovers could affect the economy at large. SOE governance frameworks are partly weak and should be strengthened along three lines: fleshing out a consistent ownership policy; giving teeth to financial oversight; and making SOE boards more professional.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund