chapter  7
19 Pages


WithAlfred H. Saulniers

Myths, misconceptions, and misperceptions abound about public enterprises and their roles in the economy. Contemporaiy Peruvian folklore also contains misconstrued and distorted notions about portfolio growth after 1968. Peruvian authorities and other analysts based their negative image of the firms on a small subset of government-owned companies. The Peruvian Experience provides indications on how to design policies to lower the need for subsidies and how to target them for maximal impact. Economists and other social scientists presume the existence of a rational government with fixed and clear objectives, constrained by the states of the world and the national economy. Both central government agencies and public firms should systematically work together to devise and implement the context for mutually productive operations. The interface between public enterprises and the planning system generates conflict and, consequently, merits major efforts at conflict management. The chapter also presents an overview of the key concepts discussed in this book.