ABSTRACT
Many government policies and programs can be used to achieve the objectives that underlie foreign ownership restrictions. To retain government ownership of a single state-owned enterprise may be beneficial in sectors that are seen to have characteristics such as: strategic for economic development and competitiveness; crucial for national culture and sovereignty; or essential in preventing monopolistic behaviour. In economically advanced nations, procurement policies are commonly used to assist firms in their development of new, high-tech products. Governments can alter incentives and outcomes through the design of the tax system. Through their impact on the rates of return involved, taxes can affect the supply of labour, the rate of saving, and the rate of investment. Many countries have developed 'competition laws' designed to prevent the creation and exercise of monopoly power by firms, foreign firms among them. The mechanism gives a government discretionary power to respond to each sector's market structure.
