State Ownership: A Residual Role?
The author reviews the state of thinking on the governance role of state ownership. He argues that a gradual transfer of operational control and financial claims over state assets remains the most desirable goal, but it needs to be paced to avoid r...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, D.C.
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2004/09/5175906/state-ownership-residual-role http://hdl.handle.net/10986/14270 |
| Summary: | The author reviews the state of thinking
on the governance role of state ownership. He argues that a
gradual transfer of operational control and financial claims
over state assets remains the most desirable goal, but it
needs to be paced to avoid regulatory capture, and the
capture of the privatization process itself. In addition,
the speed of transfer should be timed on the progress in
developing a strong regulatory governance system, to which
certain residual rights of intervention must be vested. In
many countries institutional weakness limits regulatory
capacity and reliability, yet the author's conclusion
is that in such environments, maintaining state control
undermines the very emergence of institutional capacity, and
so the balance should tip toward progressively less direct
state control. After all, what are "institutions"
if not governance mechanisms with some degree of autonomy
from both political and private interests? The gradual
creation of institutions partially autonomous from political
power must become central to the development of an optimal
mode of regulatory governance. The author offers some
suggestions about creating maximum accountability in
regulatory governance, in particular creating an internal
control system based on a rotating board representative of
users, producers, and civic organizations, to be elected by
a process involving frequent reporting and disclosure. |
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