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

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  • Uwe Böwer

Abstract

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.

Suggested Citation

  • Uwe Böwer, 2017. "State-Owned Enterprises in Emerging Europe: The Good, the Bad, and the Ugly," IMF Working Papers 2017/221, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2017/221
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    Citations

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    Cited by:

    1. Mr. Jacques A Miniane & Ezequiel Cabezon & Mr. Sebastian Weber & Christine J. Richmond & Ms. Dora Benedek & Mr. James Roaf & Mr. Francisco J Parodi & Mr. Peter Dohlman & Rima Turk & Bobana Cegar & Mic, 2019. "Reassessing the Role of State-Owned Enterprises in Central, Eastern and Southeastern Europe," IMF Departmental Papers / Policy Papers 2019/010, International Monetary Fund.
    2. Anja Baum & Clay Hacknay & Paulo Medas & Mouhamadou Sy, 2024. "Governance and state-owned enterprises: how costly is corruption?," Economics of Governance, Springer, vol. 25(2), pages 181-208, June.
    3. Aleksander Grad & Jakub Karnowski & Andrzej Rzońca, 2022. "Jak powiązać prywatyzację i rozwój filara kapitałowego w systemie emerytalnym – propozycja," Ekonomista, Polskie Towarzystwo Ekonomiczne, issue 4, pages 484-508.
    4. Bobana Cegar & Mr. Francisco J Parodi, 2019. "State-Owned Enterprises in Bosnia and Herzegovina: Assessing Performance and Oversight," IMF Working Papers 2019/201, International Monetary Fund.
    5. Ms. Anja Baum & Clay Hackney & Mr. Paulo A Medas & Mouhamadou Sy, 2019. "Governance and State-Owned Enterprises: How Costly is Corruption?," IMF Working Papers 2019/253, International Monetary Fund.

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