A Cross-country Comparison
Edited by Jean-Michael Glachant and Dominique Finon
Chapter 6: The Nordic Public Ownership Model Under Transition to Market Economy: The Case of Electricity
Atle Midttun, Joar Handeland and Terje Omland INTRODUCTION1 The Nordic/Scandinavian welfare state model has become well known as a middle path between hierarchic planned economic and laissez-faire market economy. Its supporters argue that the active, but pragmatic public engagement by the Nordic public authorities in the economy avoids the stiﬀness of the former East European planned economy models, while at the same time softening the harsh distributive outcomes of free-trade markets (Katzenstein, 1985; Mjøset, 1989; Nielsen and Pedersen, 1989). Given the pragmatic attitude of the Nordic public sector management, and its ability to pick up and implement managerial practices from private industry, it has been argued that Nordic public sector infrastructure ﬁrms are capable of maintaining a high level of productive and organizational eﬃciency. From a stakeholder perspective, it is even arguable that the pragmatic politicisation through the public ownership facilitates harmonious adaptation of the industry to its environment, which again supports a nonconﬂictual operation. Nevertheless, the model raises two major concerns: ﬁrst, when the focus is shifted from static eﬃciency to dynamic, transformational and conﬁgurational eﬃciency one may question the competitive capability and the ability to stage eﬃcient business strategies even from pragmatically oriented public infrastructure companies. Secondly, when the sector is opened up to international competition one may question the sustainability of the public sector model as a basis for business conﬁguration under participation in the international market game. This chapter discusses some of the core issues facing the...
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