IMF Working Papers

State-Owned Enterprises in Emerging Europe: The Good, the Bad, and the Ugly

By Uwe Böwer

October 30, 2017

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Uwe Böwer. State-Owned Enterprises in Emerging Europe: The Good, the Bad, and the Ugly, (USA: International Monetary Fund, 2017) accessed November 5, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

State-owned enterprises (SOEs) play an important role in Emerging Europe’s economies, notably in the energy and transport sectors. Based on a new firm-level dataset, this paper reviews the SOE landscape, assesses SOE performance across countries and vis-à-vis private firms, and evaluates recent SOE governance reform experience in 11 Emerging European countries, as well as Sweden as a benchmark. Profitability and efficiency of resource allocation of SOEs lag those of private firms in most sectors, with substantial cross-country variation. Poor SOE performance raises three main risks: large and risky contingent liabilities could stretch public finances; sizeable state ownership of banks coupled with poor governance could threaten financial stability; and negative productivity spillovers could affect the economy at large. SOE governance frameworks are partly weak and should be strengthened along three lines: fleshing out a consistent ownership policy; giving teeth to financial oversight; and making SOE boards more professional.

Subject: Contingent liabilities, Economic sectors, Energy sector, Production, Productivity, Public enterprises, Public financial management (PFM), Services sector

Keywords: Contingent liabilities, Emerging Europe Author’s, Energy sector, Europe, Firm profitability, Governance reform, Infrastructure sector, Output share, Oversight unit, Ownership function, Performance target, Productivity, Professionalized SOE board, Public enterprises, Reform effort, Services sector, SOE governance challenge, SOE landscape, SOE performance, SOE profitability, State-Owned Enterprises, WP

Publication Details

  • Pages:

    27

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2017/221

  • Stock No:

    WPIEA2017221

  • ISBN:

    9781484315163

  • ISSN:

    1018-5941

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