ABSTRACT
This chapter examines the rationale and logic behind the selection of state-owned enterprises (SOEs) as a policy tool, and the reasons why such a tool might be selected over, or alongside, some other tool like regulation or subsidy provision in the process of policy-making and policy design. In so doing it reviews the literature on policy instruments to set out a basic taxonomy of policy tools, allowing comparisons to be made between SOEs and other kinds of tools. It also examines the history of the use of SOEs which tended to occur in waves of nationalizations and privatizations over the course of the last two centuries, sometimes linked to events such as major world wars and conflicts, but at other times to ideological and partisan struggles between opponents and proponents of state and market-based policy tools. These events and debates continue to colour the evaluation and promotion of SOEs in the early to mid-21st century.
