State-Owned Enterprise Reform in Latin America: Issues and Possible Solutions
This paper examines the challenges governments in Latin America face to control their state-owned enterprises (SOEs). It argues that, absent privatization, governments can rely on a variety of reforms to address some of the main problems affecting SOEs. These problems are divided into corporate governance problems, which include agency and multiple-principals problems, and the fiscal governance problem, which has to do with the discretionary nature of the fiscal relationship between the government and its enterprises. Then the paper discusses a variety of solutions for each of these problems. Rather than providing a single recipe, it argues that governments can design governance mechanisms that rely on the market (e.g., by partially privatizing a firm and listing it on a stock exchange), on ex-ante administrative controls, or on hybrid solutions that combine both. Thus, the paper argues that the mechanisms to deal with the problems of SOEs have to be designed on a case-by-case basis, taking into account the specific problems of the public enterprise in question and the economic (and political) environment affecting it.
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| Format: | Discussion Papers & Presentations biblioteca |
| Language: | English |
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Inter-American Development Bank
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| Subjects: | Fiscal Management, Public Service, Fiscal Policy, Governance, G30 - Corporate Finance and Governance: General, H11 - Structure Scope and Performance of Government, H50 - National Government Expenditures and Related Policies: General, H77 - Intergovernmental Relations • Federalism • Secession, state reform;corporate governance;Latin America;fiscal decentralization;State-owned enterprises;privatization, |
| Online Access: | https://doi.org/10.18235/0000128 https://publications.iadb.org/en/state-owned-enterprise-reform-latin-america-issues-and-possible-solutions |
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