ABSTRACT
This chapter traces the links between the origins of public enterprises, including the motivations of policymakers in setting up public firms, and their financial performance. In both Brazil and Mexico, the origins of the contemporary public enterprise sector are traced to the 1930s and the rise of strong national leaders intent on spurring industrialization in their relatively backward countries. As in Brazil, the bulk of the Mexican public sector's equity is concentrated in a few firms. Social objectives, as opposed to more narrowly commercial ones, have been more important in the creation of Mexican public enterprises than has been the case in Brazil. Brazilian public enterprises are probably more important than their Mexican counterparts in terms of decision-making and overall resource allocation. By contrast to the Brazilian experience, Mexican public enterprises have had great difficulty in generating sales revenues sufficient to cover current operating expenses.
