Are All State-Owned Enterprises Equal ? A Taxonomy of Economic Activities to Assess SOE Presence in the Economy
This paper proposes a sector taxonomy of the rationale for the presence of state-owned enterprises in specific industries. The taxonomy is conceptualized only on an efficiency-based rationale for state participation in different economic activities, abstracting it from social or political justification of state-owned enterprises, which can be subjective or conditioned to the country context. The taxonomy is leveraged on a standard industry classification, the Nomenclature of Economic Activities Revision 2 four-digit level sector classification, which is sufficiently disaggregated to resemble specific markets, and thus more appropriate for analyzing the presence of state-owned enterprises through the lens of industrial organization. The proposed taxonomy deploys a decision tree, based on efficiency-based criteria, to classify 563 disaggregated sectors into one of three groups: a “competitive” category, for which the presence of state-owned enterprises does not appear to be justified on grounds of economic efficiency/market failure; a “natural monopoly” category, which includes economic sectors whose market structure is characterized by economies of scale and subadditivity costs that could be corrected via the participation of state-owned enterprises; and a “partially contestable” category, which includes economic sectors characterized by some form of market power, externalities, or other market failures that could be addressed through state ownership. The application of the decision tree classifies 11 disaggregated sectors as natural monopolies, 45 as partially contestable, and the remaining 505 as competitive.
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Format: | Working Paper biblioteca |
Language: | English English |
Published: |
World Bank, Washington, DC
2022-12
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Subjects: | ECONOMIC ACTIVITY CLASSIFICATION, PUBLIC ENTERPRISE, MARKET STRUCTURE, STATE-OWNED ENTERPRISE REFORM, STATE-OWNED ENTERPRISE (SOE), MARKET FAILURES, |
Online Access: | http://documents.worldbank.org/curated/en/099951412132222133/IDU0e7057cdf09fa8044eb09d8a058ea7dfe2831 http://hdl.handle.net/10986/38452 |
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dig-okr-10986384522023-01-24T15:27:50Z Are All State-Owned Enterprises Equal ? A Taxonomy of Economic Activities to Assess SOE Presence in the Economy Dall’Olio, Andrea Goodwin, Tanja Martinez Licetti, Martha Alonso Soria, Ana Cristina Drozd, Maciej Orlowski, Jan Patiño Peña, Fausto Sanchez-Navarro, Dennis ECONOMIC ACTIVITY CLASSIFICATION PUBLIC ENTERPRISE MARKET STRUCTURE STATE-OWNED ENTERPRISE REFORM STATE-OWNED ENTERPRISE (SOE) MARKET FAILURES This paper proposes a sector taxonomy of the rationale for the presence of state-owned enterprises in specific industries. The taxonomy is conceptualized only on an efficiency-based rationale for state participation in different economic activities, abstracting it from social or political justification of state-owned enterprises, which can be subjective or conditioned to the country context. The taxonomy is leveraged on a standard industry classification, the Nomenclature of Economic Activities Revision 2 four-digit level sector classification, which is sufficiently disaggregated to resemble specific markets, and thus more appropriate for analyzing the presence of state-owned enterprises through the lens of industrial organization. The proposed taxonomy deploys a decision tree, based on efficiency-based criteria, to classify 563 disaggregated sectors into one of three groups: a “competitive” category, for which the presence of state-owned enterprises does not appear to be justified on grounds of economic efficiency/market failure; a “natural monopoly” category, which includes economic sectors whose market structure is characterized by economies of scale and subadditivity costs that could be corrected via the participation of state-owned enterprises; and a “partially contestable” category, which includes economic sectors characterized by some form of market power, externalities, or other market failures that could be addressed through state ownership. The application of the decision tree classifies 11 disaggregated sectors as natural monopolies, 45 as partially contestable, and the remaining 505 as competitive. 2023-01-11T15:29:54Z 2023-01-11T15:29:54Z 2022-12 Working Paper http://documents.worldbank.org/curated/en/099951412132222133/IDU0e7057cdf09fa8044eb09d8a058ea7dfe2831 http://hdl.handle.net/10986/38452 English en Policy Research Working Papers;10262 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Working Papers Working Papers :: Policy Research Working Papers |
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ECONOMIC ACTIVITY CLASSIFICATION PUBLIC ENTERPRISE MARKET STRUCTURE STATE-OWNED ENTERPRISE REFORM STATE-OWNED ENTERPRISE (SOE) MARKET FAILURES ECONOMIC ACTIVITY CLASSIFICATION PUBLIC ENTERPRISE MARKET STRUCTURE STATE-OWNED ENTERPRISE REFORM STATE-OWNED ENTERPRISE (SOE) MARKET FAILURES |
spellingShingle |
ECONOMIC ACTIVITY CLASSIFICATION PUBLIC ENTERPRISE MARKET STRUCTURE STATE-OWNED ENTERPRISE REFORM STATE-OWNED ENTERPRISE (SOE) MARKET FAILURES ECONOMIC ACTIVITY CLASSIFICATION PUBLIC ENTERPRISE MARKET STRUCTURE STATE-OWNED ENTERPRISE REFORM STATE-OWNED ENTERPRISE (SOE) MARKET FAILURES Dall’Olio, Andrea Goodwin, Tanja Martinez Licetti, Martha Alonso Soria, Ana Cristina Drozd, Maciej Orlowski, Jan Patiño Peña, Fausto Sanchez-Navarro, Dennis Are All State-Owned Enterprises Equal ? A Taxonomy of Economic Activities to Assess SOE Presence in the Economy |
description |
This paper proposes a sector taxonomy
of the rationale for the presence of state-owned enterprises
in specific industries. The taxonomy is conceptualized only
on an efficiency-based rationale for state participation in
different economic activities, abstracting it from social or
political justification of state-owned enterprises, which
can be subjective or conditioned to the country context. The
taxonomy is leveraged on a standard industry classification,
the Nomenclature of Economic Activities Revision 2
four-digit level sector classification, which is
sufficiently disaggregated to resemble specific markets, and
thus more appropriate for analyzing the presence of
state-owned enterprises through the lens of industrial
organization. The proposed taxonomy deploys a decision tree,
based on efficiency-based criteria, to classify 563
disaggregated sectors into one of three groups: a
“competitive” category, for which the presence of
state-owned enterprises does not appear to be justified on
grounds of economic efficiency/market failure; a “natural
monopoly” category, which includes economic sectors whose
market structure is characterized by economies of scale and
subadditivity costs that could be corrected via the
participation of state-owned enterprises; and a “partially
contestable” category, which includes economic sectors
characterized by some form of market power, externalities,
or other market failures that could be addressed through
state ownership. The application of the decision tree
classifies 11 disaggregated sectors as natural monopolies,
45 as partially contestable, and the remaining 505 as competitive. |
format |
Working Paper |
topic_facet |
ECONOMIC ACTIVITY CLASSIFICATION PUBLIC ENTERPRISE MARKET STRUCTURE STATE-OWNED ENTERPRISE REFORM STATE-OWNED ENTERPRISE (SOE) MARKET FAILURES |
author |
Dall’Olio, Andrea Goodwin, Tanja Martinez Licetti, Martha Alonso Soria, Ana Cristina Drozd, Maciej Orlowski, Jan Patiño Peña, Fausto Sanchez-Navarro, Dennis |
author_facet |
Dall’Olio, Andrea Goodwin, Tanja Martinez Licetti, Martha Alonso Soria, Ana Cristina Drozd, Maciej Orlowski, Jan Patiño Peña, Fausto Sanchez-Navarro, Dennis |
author_sort |
Dall’Olio, Andrea |
title |
Are All State-Owned Enterprises Equal ? A Taxonomy of Economic Activities to Assess SOE Presence in the Economy |
title_short |
Are All State-Owned Enterprises Equal ? A Taxonomy of Economic Activities to Assess SOE Presence in the Economy |
title_full |
Are All State-Owned Enterprises Equal ? A Taxonomy of Economic Activities to Assess SOE Presence in the Economy |
title_fullStr |
Are All State-Owned Enterprises Equal ? A Taxonomy of Economic Activities to Assess SOE Presence in the Economy |
title_full_unstemmed |
Are All State-Owned Enterprises Equal ? A Taxonomy of Economic Activities to Assess SOE Presence in the Economy |
title_sort |
are all state-owned enterprises equal ? a taxonomy of economic activities to assess soe presence in the economy |
publisher |
World Bank, Washington, DC |
publishDate |
2022-12 |
url |
http://documents.worldbank.org/curated/en/099951412132222133/IDU0e7057cdf09fa8044eb09d8a058ea7dfe2831 http://hdl.handle.net/10986/38452 |
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