Yingyi Qian
- Published in print:
- 2017
- Published Online:
- May 2018
- ISBN:
- 9780262534246
- eISBN:
- 9780262342728
- Item type:
- chapter
- Publisher:
- The MIT Press
- DOI:
- 10.7551/mitpress/9780262534246.003.0006
- Subject:
- Economics and Finance, International
We develop a theory of the ownership of firms in an environment without secure property rights against state encroachment. "Private ownership" leads to excessive revenue hiding and "state ownership" ...
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We develop a theory of the ownership of firms in an environment without secure property rights against state encroachment. "Private ownership" leads to excessive revenue hiding and "state ownership" (i.e., national government ownership) fails to provide incentives for managers and local governments in a credible way. Because "local government ownership" integrates local government activities and business activities, local government may better serve the interests of the national government, and thus local government ownership may credibly limit state predation, increase local public goods provision, and reduce costly revenue hiding. We use our theory to interpret the relative success of local government-owned firms during China’s transition to a market economy.Less
We develop a theory of the ownership of firms in an environment without secure property rights against state encroachment. "Private ownership" leads to excessive revenue hiding and "state ownership" (i.e., national government ownership) fails to provide incentives for managers and local governments in a credible way. Because "local government ownership" integrates local government activities and business activities, local government may better serve the interests of the national government, and thus local government ownership may credibly limit state predation, increase local public goods provision, and reduce costly revenue hiding. We use our theory to interpret the relative success of local government-owned firms during China’s transition to a market economy.
Sumit K. Majumdar
- Published in print:
- 2018
- Published Online:
- August 2018
- ISBN:
- 9780199641994
- eISBN:
- 9780191864070
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/oso/9780199641994.003.0009
- Subject:
- Business and Management, Political Economy, Business History
The chapter sums up the evidence and concludes that India’s industrial performance has been sub-par. Given India’s uninspiring industrial performance, three ameliorative reforms, an administrative ...
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The chapter sums up the evidence and concludes that India’s industrial performance has been sub-par. Given India’s uninspiring industrial performance, three ameliorative reforms, an administrative reform, a structural reform, and a behavioral reform, are put forward. Since talent management is a critical administrative functionality of capitalism, an Indian Management Service would fill key strategic management positions in State firms to deepen the human capital pool for strategic management in the State sector. State sector firms’ ownership could be restructured. An autonomous India Public Investment Authority would be the agency for share-vesting and portfolio management. The India Public Investment Authority would own controlling stakes, while granting strategic and operational autonomy to the firms. A message of economic nationalism, on the theme that a productive industrial India will be a prosperous India, has to stir a consciousness for Indians to change behavior to achieve the efficiency needed for India’s economy to prosper.Less
The chapter sums up the evidence and concludes that India’s industrial performance has been sub-par. Given India’s uninspiring industrial performance, three ameliorative reforms, an administrative reform, a structural reform, and a behavioral reform, are put forward. Since talent management is a critical administrative functionality of capitalism, an Indian Management Service would fill key strategic management positions in State firms to deepen the human capital pool for strategic management in the State sector. State sector firms’ ownership could be restructured. An autonomous India Public Investment Authority would be the agency for share-vesting and portfolio management. The India Public Investment Authority would own controlling stakes, while granting strategic and operational autonomy to the firms. A message of economic nationalism, on the theme that a productive industrial India will be a prosperous India, has to stir a consciousness for Indians to change behavior to achieve the efficiency needed for India’s economy to prosper.
