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International Handbook on Industrial Policy

Edited by Patrizio Bianchi and Sandrine Labory

This timely and much-needed Handbook reconsiders an old topic from a fresh perspective, raising a number of new, interesting and worthwhile issues in the wake of ten years of globalization. This comprehensive analysis illustrates that old-style industrial policies whereby the government directly intervened in markets, and was often the producer itself, are no longer relevant. Structural changes occurring in economies – summarized in the term ‘globalization’ – are triggering the definition and implementation of new industrial policies. The contributors, leading experts in their field, unite to evaluate this shift of over a decade ago.
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Chapter 10: State-Owned Enterprises, Privatization and Industrial Policy

Andrea Goldstein


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 redirected resources unemployed. State ownership of utilities,...

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