organization established by the government under public or private law as a

Organization established by the government under

This preview shows page 96 - 98 out of 146 pages.

organization established by the government under public or private law as a legal personality which is autonomous or semi-autonomous and produces/ provides goods and services on a full or partial self-financing basis, and in which the Government or a public body/agency participates by way of hav- ing shares or representation in its decision-making structure (Kauzya). PEs can take the form of departmental undertakings, statutory corpora- tions and joint stock companies. They can be categorized into four types based on their activity: the activities of the first are privately remunerative, the activities of the second are socially profitable but not privately remunera- tive, the activities of the third are privately remunerative but not capable of private execution, while the fourth category acts as natural monopolies (Basu). Additionally, PEs can also be categorized into four types according to their role: promotion, facilitation, regulation and commercial orientation (Otobo). Since its inception, PE management has undergone several phases of evolution in order to respond to its own pitfalls and successes. PE has evolved over the years, as countries have undertaken different activities in order to promote economic development. The state has been influential in stimulat- ing economic growth commencing in the first half of the 20 th century and its role has continued to increase in both developed and developing economies. However, since the late 70s, the developmental orientation of PE has come under attack due to: 1) Growing economic/financial problems accompanying worldwide recession (late 70s); 2) Resultant debt crises in Africa and Latin America; 3) Succession of politically conservative governments in North America (Reaganomics) and Europe (Thatcher) in the 80s; 4) Shift to market economies in Asia, Latin America, and Eastern Europe in the 90s; 5) 25%-50% of all outstanding domestic debt and substantial portion of foreign borrowing in developing countries accounted for by PEs (1980 World Bank study); and 6) Heavy demands by PEs for capital squeezing private investors out of capital markets in some countries, and limiting the private sector’s access to borrowing for investments that could generate jobs, income and public revenues (Rondinelli). Issues on Public Enterprise Management
Image of page 96
¶2 Public Enterprises: Unresolved Challenges and New Opportunities Today, in the era of the MDGs, the insight gained along the evolution- ary trajectory must be integrated into a multidimensional and innovative framework for reinventing PEs and realizing their potential to fulfill both economic and social objectives. This re-conceptualization and reinvention of PEs is paramount in order to achieve the MDGs. Although adequate provi- sion of health and education are the most obvious indicators of a state’s com- mitment to the MDGs, access to said services and their impact are hinged on the availability and quality of infrastructure, electricity, telecommunications, water and other utilities. Given the tremendous strides required of PEs in
Image of page 97
Image of page 98

You've reached the end of your free preview.

Want to read all 146 pages?

  • Spring '17

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture