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Edited by Patrizio Bianchi and Sandrine Labory
Chapter 10: State-Owned Enterprises, Privatization and Industrial Policy
10 State-owned enterprises, privatization and industrial policy Andrea Goldstein Introduction This chapter critically assesses alternative explanations of state ownership as a tool for industrial policy.1 It provides indirect evidence on the role that state-owned enterprises (SOEs) have played in the economic growth process of selected OECD and non-OECD countries, on the motives that have underlined the pendulum switch towards privatization, on the conditions under which SOEs have been sold, and on the consequences of this policy choice. In order to highlight major outstanding issues, a separate sub-section presents a rapid analysis of current issues in the case of France, a country that has consistently used state ownership and divestiture as a major tool of microeconomic, and indeed macroeconomic, policy. The links between market structure and eﬃciency, on the one hand, and the perceived diﬀerences between domestic and foreign ownership, on the other hand, are stressed. State ownership in economic development State ownership has characterized most market and, a fortiori, planning economies in the 20th century (Toninelli, 2000). Financial, strategic, political and technological reasons have been advanced to justify either the nationalization of existing private-sector ﬁrms or the ex novo creation of SOEs. Wars, in particular, played a major role in explaining the rise of state ownership: the Spanish Civil War, World War I for Germany, World War II for Italy and the USA, States nationalized to increase output and secure self-suﬃciency in certain key industries, or to stimulate investment and employment when the end of war left...
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