Why Performance Contracts for State-Owned Enterprises Haven't Worked
When privatization is not feasible or palatable, developing country governments seeking to improve the performance of state enterprises are often negotiating performance contracts with their managers. Many of these contracts have been put in place...
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| Format: | Viewpoint |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/1998/08/441600/performance-contracts-state-owned-enterprises-havent-worked http://hdl.handle.net/10986/11537 |
| Summary: | When privatization is not feasible or
palatable, developing country governments seeking to improve
the performance of state enterprises are often negotiating
performance contracts with their managers. Many of these
contracts have been put in place with World Bank assistance.
Research shows that they rarely work. The author summarizes
the rationale for performance contracts and the evidence
against them and explores the reasons why they haven't
worked. She concludes that since a well-designed and
carefully enforced performance contract can be as
politically costly as a well-designed privatization,
performance contracts are not likely to be successful in
countries that lack the political will to privatize. |
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