ABSTRACT
In recent years, successive announcements of imminent privatisation campaigns have provoked a new debate – insufficient and poorly developed despite the issues at stake – on the role of the state-owned company. Two main conclusions have arisen from this process. First, that although from a theoretical standpoint entrepreneurial efficiency is independent of the ownership status of the productive unit, empirical evidence all too frequently shows up the deficiencies of public sector business management. Second, even assuming privately owned companies have more incentives to perform efficiently than state enterprises, it is still undoubtedly the case that privatisation is not the definitive solution to all management deficiencies. This is because, on the one hand, a company’s future depends on its long-term ability to stay competitive and, on the other, the supposedly beneficial effects of privatisation may be curtailed if the markets privatised companies operate in are not truly competitive. The solution, therefore, is to liberalise before privatising.
