Governance in State-Owned Enterprises Revisited : The Cases of Water and Electricity in Latin America and the Caribbean

This paper studies the governance structure of state-owned enterprises in the water and electricity sectors of Latin America and the Caribbean. Through a unique dataset, the paper compares 44 leading state companies of the region based on an aggreg...

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Bibliographic Details
Main Authors:	Andrés, Luis Alberto, Guasch, José Luis, López Azumendi, Sebastián
Format:	Policy Research Working Paper
Language:	English
Published:	2012
Subjects:	ACCOUNTABILITY ACCOUNTABILITY MECHANISMS ACCOUNTING ACCOUNTING STANDARDS AGENCY COSTS AUDITING AUDITORS AUTHORITY AUTONOMY BOARD MEMBERS BUREAUCRACY BUSINESS CORPORATION CEO CEOS CHIEF EXECUTIVE CITIZENS CIVIL SERVICE CIVIL SOCIETY COLLUSION COMMERCIAL LAW COMPANY COMPETITIVE BEHAVIOR CONCESSION AGREEMENT CONSOLIDATION CONSTITUENCY CONVENTIONAL WISDOM CORPORATE GOVERNANCE CORPORATE GOVERNANCE CODE CORPORATE LAW CORPORATE STRATEGIES CORPORATE STRUCTURE CORPORATIONS CORPORATIZATION CORRUPTION CRITICAL IMPORTANCE CUSTOMER SERVICES DEBT DECENTRALIZATION DECISION MAKING DECISION MAKING POWER DECISION-MAKING DECISION-MAKING BODY DELIVERY OF SERVICES DISCLOSURE ECONOMIC REGULATION EMERGING MARKETS ENTERPRISE DEVELOPMENT ENTERPRISE REFORM ENTERPRISE RESTRUCTURING EXPANSION EXPANSION OF SERVICE EXTERNAL ACCOUNTABILITY FINANCIAL DISCLOSURE FINANCIAL INFORMATION FINANCIAL PERFORMANCE FINANCIAL TRANSPARENCY GOVERNANCE ARRANGEMENTS GOVERNANCE DIMENSIONS GOVERNANCE EFFECTIVENESS GOVERNANCE INDICATORS GOVERNANCE STRATEGIES GOVERNMENT AGENCY GOVERNMENT AUTHORITIES GOVERNMENT COMPANIES GOVERNMENT CORPORATIONS GOVERNMENT ENTITIES GROUP OF COMPANIES GROWTH RATES HOLDING COMPANY HUMAN CAPITAL HUMAN RESOURCES INCOME INCOME LEVELS INCORPORATED INDEPENDENT AUDIT INDEPENDENT DIRECTORS INDUSTRIAL TARIFFS INFRASTRUCTURE INVESTMENT INFRASTRUCTURE PRIVATIZATION INSOLVENCY INSTITUTIONAL ARRANGEMENT INSTITUTIONAL SHAREHOLDERS INSTITUTIONAL SYSTEMS INTERNATIONAL ACCOUNTING STANDARDS INTERNATIONAL DEVELOPMENT LABOR PRODUCTIVITY LACK OF ACCOUNTABILITY LEGAL FRAMEWORK LEGAL REQUIREMENTS LIMITED LIMITED LIABILITY LISTING OF COMPANIES MANAGERS MANUFACTURERS MUNICIPALITY NATIONAL ASSOCIATION NATIONS OPERATIONAL PERFORMANCE OWNERSHIP STRUCTURE PARLIAMENT PARLIAMENTARY OVERSIGHT PERFORMANCE INDICATORS PERSONS POLITICAL ECONOMY POLITICAL INFLUENCE POLITICIANS PRESIDENCY PRIVATE COMPANIES PRIVATE COMPANY PRIVATE ENTERPRISE PRIVATE ENTERPRISES PRIVATE FIRM PRIVATE INVESTMENT PRIVATE INVESTORS PRIVATE PARTNERSHIPS PRIVATE SECTOR DEVELOPMENT PRIVATE SECTOR PARTICIPATION PRIVATE UTILITIES PROFITABILITY PROVISION OF INFRASTRUCTURE PROVISION OF INFRASTRUCTURE SERVICES PROVISION OF SERVICES PROXY PUBLIC ACCOUNTABILITY PUBLIC ADMINISTRATION PUBLIC COMPANIES PUBLIC CORPORATION PUBLIC ENTERPRISES PUBLIC FINANCING PUBLIC HEARINGS PUBLIC MANAGEMENT PUBLIC SECTOR PUBLIC SECTOR GOVERNANCE PUBLIC SECTOR MANAGEMENT PUBLIC SERVICE PUBLIC UTILITIES PUBLIC WATER PUBLIC-PRIVATE PARTNERSHIPS QUALITY OF SERVICE REGULATORY AGENCIES REGULATORY AGENCY REGULATORY AUTHORITIES REGULATORY AUTHORITY REGULATORY BODIES REGULATORY POLICIES REPRESENTATIVES RESIDENTIAL TARIFFS SERVICE PROVIDERS SERVICE PROVISION SERVICE QUALITY SHAREHOLDER SHAREHOLDERS SKILLED WORKERS SMALL COMPANIES SMALLER COMPANIES SOCIETY STAKEHOLDERS STATE ACTION STATE ENTERPRISE STATE ENTERPRISES STATE OWNED ENTERPRISES STATE OWNERSHIP STATE SECTOR STATE SUBSIDIES STATE-OWNED ENTERPRISES STOCK EXCHANGE STOCK MARKET STOCK MARKETS SUBSIDIARIES TARIFF INCREASES TAX OBLIGATION TAX OBLIGATIONS TAX REGIME TRADE UNIONS TRANSPARENCY TRANSPARENT DISCLOSURE UNDUE INFLUENCE UNIONS VESTED INTERESTS VETO VOTING WAGES WATER COMPANIES WATER COVERAGE WATER SECTOR WATER SUPPLY WATER TARIFFS WATER UTILITIES
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110801150940 http://hdl.handle.net/10986/3508

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Summary:	This paper studies the governance structure of state-owned enterprises in the water and electricity sectors of Latin America and the Caribbean. Through a unique dataset, the paper compares 44 leading state companies of the region based on an aggregate measure of corporate governance and six salient aspects of their design: board, chief executive officer, performance orientation, management, legal framework, and transparency/disclosure. The results indicate the need for improvement in areas such as the selection and appointment of directors to the board and the performance-orientation of the enterprises. The paper also highlights the importance of discussing the management of state-owned enterprises in the wider context of public sector governance, with particular focus on accountability. Moreover, it recognizes the role of accountability as central in the management of state-owned enterprises, recommending a better understanding of regulation and performance management. The paper finds a positive correlation between corporate governance and the utilities' performance. Among the different aspects of corporate governance, performance orientation and professional management seem to be the highest contributors to well-performing state-owned enterprises. State-owned enterprises in the electricity sector show higher governance levels than those in the water sector.

Governance in State-Owned Enterprises Revisited : The Cases of Water and Electricity in Latin America and the Caribbean

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