Governance Arrangements for State Owned Enterprises
The aim of this paper is to shed new light on key challenges in governance arrangements for state owned enterprises in infrastructure sectors. The paper provides guidelines on how to classify the fuzzy and sometimes conflicting development goals of...
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2008/03/9049342/governance-arrangements-state-owned-enterprises http://hdl.handle.net/10986/6564 |
| Summary: | The aim of this paper is to shed new
light on key challenges in governance arrangements for state
owned enterprises in infrastructure sectors. The paper
provides guidelines on how to classify the fuzzy and
sometimes conflicting development goals of infrastructure
and the governance arrangements needed to reach such goals.
Three policy recommendations emerge. First, some of the
structures implied by internationally adopted principles of
corporate governance for state owned enterprises favoring a
centralized ownership function versus a decentralized or
dual structure have not yet been sufficiently
"tested" in practice and may not suit all
developing countries. Second, general corporate governance
guidelines (and policy recommendations) need to be carefully
adapted to infrastructure sectors, particularly in the
natural monopoly segments. Because the market structure and
regulatory arrangements in which state owned enterprises
operate matters, governments may want to distinguish the
state owned enterprises operating in potentially competitive
sectors from the ones under a natural monopoly structure.
Competition provides not only formidable benefits, but also
unique opportunities for benchmarking, increasing
transparency and accountability. Third, governments may
want to avoid partial fixes, by tackling both the internal
and external governance factors. Focusing only on one of the
governance dimensions is unlikely to improve SOE performance
in a sustainable way. |
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