ABSTRACT
The National Enterprise Board (NEB) was a policy of direct state intervention as it involved the direct provision of equity finance by the state. The policy was born out of a lack of faith in the ability of market forces to solve the industrial problems of the mid-1970s. The distribution of the finance allocated to the NEB was also political. Although the NEB had a board that was theoretically independent of government, the aims of the Board were set by politician. When the Board was set up it was given the target of achieving an annual rate of return of between 15 and 20% on capital employed by 1981. However, by 1980 the NEB had made little progress in reaching this target and, indeed, after 1978 returns had deteriorated sharply. Many defenders of the Board argue that the performance of its investments must be seen in the context of the recession that ravaged the economy between 1980 and 1982.
