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This chapter begins by framing the theoretical debate about the legitimacy and efficiency of state ownership of business enterprises, and then examines the empirical evidence for and against state ownership. Since the evidence overwhelmingly indicates that state ownership is less efficient than private ownership in most real industrial settings, the reform of state-owned enterprises (SOEs) by measures short of privatization, such as exposing state enterprises to competition or imposing hard budget constraints is assessed. While some economic reforms can be effective in their own right, the question of whether these reforms would be more effective if coupled with a shift to private ownership remains unanswered. Thus, many countries have decided to launch large-scale privatization programs. The fiscal and macroeconomic impact of these programs on the public finances of divesting countries are examined.

This chapter poses a new agenda for the field of economic development, asking whether and how foreign investment is integrated into the local networks of host economies. It first presents the basic contours of this case: the Hungarian economy after the collapse of state socialism, the subsequent emergence of interenterprise networks, the demise of state ownership, and the rise of foreign investment. After describing the data collection involved, the chapter charts the changing proportions of the Hungarian economy that are foreign or domestic, and networked or isolated. To identify the microprocesses of interorganizational network formation that explain the macrostructural outcomes, the chapter turns to modeling that makes sequences of network positions the unit of analysis. Finally, this chapter explores the patterns of firms' personnel ties to political parties and then presents findings that demonstrate the relationship between the network sequence pathways, firms' political ties, and levels of foreign investment.

Since the early 1970s, state ownership has been an important element in the management of petroleum resources on the Norwegian Continental Shelf (NCS). In recent years however, important developments have taken place, both as regards the organization and the management of state ownership. This chapter analyses these developments. Section I makes a basic distinction between state ownership of subsea petroleum deposits and state ownership of licence interests. Section II discusses state ownership of the subsea petroleum deposits. Section III discusses how the state manages its ownership in the petroleum activities, i.e. exploration, production, transport, and eventually, abandonment. Section IV further analyses how the state manages its licence interests through the state company Petoro; Section V concludes.

This chapter examines why governments are choosing to privatize state-owned banks (SOBs), how they are selling SOBs, and whether these sales have achieved the goals set by the divesting governments. The overall impact of state ownership of banks has been disastrous in almost every country. Reducing state influence on credit allocation decisions is essential for countries seeking to establish a more efficient and market-oriented economy. Privatizing governments should completely divest their ownership in banks whenever and wherever it is politically feasible to do so. Privatization is also associated with performance improvements in divested banks, though the extent of improvement varies by region and stage of national development.

This chapter analyses different entitlements to natural resources and the extent to which state ownership implies a different or less intensive regulation than where such ownership is not the case. It will focus on the prime regulatory instruments used to transfer rights of utilization, and seeks to identify the differences as to the protection of those rights, if any. The topic will be illustrated by different civil law examples. The analysis will be limited to three groups of natural resources: (i) oil and gas; (ii) sand, stone and gravel; and (iii) wind and waves.

This chapter begins with a discussion of the history of state ownership. It then charts the rise of privatization programs since these were first popularized by Margaret Thatcher’s Conservative British government in the early 1980s. An overview of chapters included in this volume is presented.

The exploration and production of oil and gas in Brazil have been government monopolies for a considerable time. Under this model, these mineral resources belong to the government, and are to be used in accordance with the national interest. The state-run company, Petrobras (Petr óleo Brasileiro SA), maintained exclusive control of all oil industry activities in Brazil for four decades following its establishment in 1953. In 1995, Amendment No 9 to the 1988 Federal Constitution changed the legal structure of the state monopoly, and established a new regulatory framework for the Brazilian oil industry. Although government monopoly has been retained, the amended Constitution and the Oil and Natural Gas Act (Federal Law No 9478/1997) allowed private companies to exercise ownership over oil and gas through concession contracts and the payment of fees and surtaxes to the government. The opening of the petroleum market has permitted a very large influx of money from national and international companies, which has been sufficient to increase the number of proven oil reserves and enhance energy security. However, the global energy crisis, the gradual rise of oil and gas prices, and the recent discoveries of new reserves in Brazilian deep waters (the so-called ‘pre-salt’ fields) have led to renewed political debate about the legal structure of oil industry activities, with arguments being made for it to be changed back in the direction of greater governmental participation. Over the course of the past century, the balance of public and private involvement in the Brazilian petroleum industry has in fact undergone a number of changes, as this chapter will discuss.

This chapter begins with an overview of how state ownership of telecommunications evolved during the 20th century. It details the key regulatory issues governments face when privatizing its telecom provider, and offers policy recommendations based on the experiences of countries that have privatized their telecommunications service providers. The two basic methods used to divest telecom ownership stakes and empirical evidence on the effectiveness of telecom privatization are discussed.

The energy liberalization process in the European Union (EU) has had a considerable impact on the electricity and gas sector in the Netherlands. The need to implement the EU energy directives has resulted in the introduction of statutory laws and regulations in a sector that, until that time, was almost unfamiliar with such regulation. This chapter begins with a brief overview of the Dutch energy sector before liberalization. It then discusses the most important elements of the energy liberalization process. As a result of this process, energy companies increasingly act as commercial entities instead of public utilities. The way in which the liberalization process affects the extent and type of regulation is illustrated by two different examples. The first example concerns the regulation of pipeline safety and the current trend to switch from a system of self-regulation to statutory legislation. A second involves the tendency to turn to state ownership as a command-and-control instrument in addition to the application of recently introduced statutory laws.

This chapter considers one major aspect of the heterogeneous responses of cultural and political elites to the rise of the media and burgeoning entertainment industry. It focuses on efforts, above all through means of state regulation, to reassert elite values and standards by establishing a formal framework of control over popular culture, including literary and film censorship as well as state ownership of broadcasting. While the censorship of cultural forms as a means of social control was of course nothing new at the time, the avowedly commercial orientation of most popular amusements and their unprecedented dissemination via new communications technologies elicited a new brand of cultural interventionism among the educated elite, a belief not only in their ability to improve the tastes and cultural practices of the masses, but indeed in their right — even duty — to do so.

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.

This chapter examines who owns the world’s major media companies. It identifies the major owners of media properties around the world. There are various types of ownership: public ownership; and private ownership-by individuals and families, or by institutional investors such as private equity funds. Governments and public institutions own about one third of the world’s major media organizations, including telecom. Large institutional financial firms own another third. And major individual and family ownership covers the remaining third. The chapter measures and identifies the ownership structure of major media firms, as well as the media holdings of owners. The largest of owners are the Chinese government; financial institutions such as Vanguard and Fidelity; and individuals such as Carlos Slim, the Google founders

This chapter examines the optimal design of the financial regulatory architecture and the relationship it should have with the competition policy authority. It first considers cases in the European Union and the developments since the adoption of banking union proposals, along with the reform in the United Kingdom since the 2007–2009 crisis. It then discusses public interventions in crisis and how competitive distortions of state aid and mergers induced by the crisis can be dealt with by competition policy. It also explores the consequences of state ownership and the performance of hybrid institutions such as savings banks as well as the state aid policy in the EU banking sector. The chapter goes on to assess the role of competition policy in addressing the too-big-to-fail (TBTF) problem before concluding with an analysis of the treatment of mergers in crisis situations, focusing on cases in Spain, the United Kingdom, and the United States.

An important task in the transition to a market economy is to transform the ownership structure. In 1993, a document of the Central Committee of the Chinese Communist Party declared that management of small state-owned enterprises could be contracted out, leased, shifted to partnerships, or sold to collectives or individuals. But these initiatives were met with criticism from so-called leftists in the form of several Ten-Thousand-Chinese-Word Manifestos. The manifestos criticized the government for letting the nonstate sector grow faster than the state sector. But officials and scholars in favor of the market-oriented reforms fought back, arguing that the state-owned enterprises should retreat from the competitive sectors. This debate came to an end when the 1997 Fifteenth Communist Party Congress called for a readjustment of the ownership structure, even though public ownership in various forms remained dominant in China’s economic system.

This chapter compares state ownership of enterprises in China with that found in a variety of other countries. It focuses on both general patterns of state ownership and on the corporate governance implications of such arrangements. It argues that rather than thinking about Chinese state capitalism as a unique and exceptional system, we should think of it as a system with multiple similarities with state capitalism in other countries. In China and many other countries governments still hold majority and minority equity positions in tens, if not hundreds, of firms, either directly or indirectly, using pyramidal ownership structures. Finally, this chapter explains how new forms of majority and minority state ownership have reduced agency problems in SOEs, and ends by pointing out the few exceptional characteristics of the Chinese variety of state capitalism.

Within the Middle East and North Africa (MENA) region, a common feature of corporate financial structures is that governments have always been majority owners of many commercial companies. This chapter provides a detailed picture of state ownership in the region. It finds evidence of a decline in the privatization effort in the 2000s. Privatization may be important for the development of institutional ownership, yet, in some cases, it may not be in the best interests of the public, when cronyism is prevalent. In this context, it is important to understand the role of the state in the growth of capital markets in the region, and the efficiency of the overall development model.

This chapter studies the drivers of the transformation of business groups in Spain and complements the traditional drivers (weak institutions and a closed economy) with new ones (industry regulation and owner ideology). These drivers vary with the ownership of business groups. First, state-owned business groups emerge following an ideology of national economic development, reduce scope with pro-market reforms, and continue to exist in line with the ideology of social stability and strategic development. Second, bank-owned business groups emerge as a result of industry regulation, and decline with deregulation after pro-market reforms. Third, family-owned business groups emerge to benefit from opportunities in a closed economy with weak institutions, and refocus in response to competition after pro-market reforms. Finally, labor-owned business groups emerge as a result of an ideology of social development, and continue after pro-market reforms in line with this ideology.