How to improve the performance of state enterprises?

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State enterprises on average account for 15% of GDP in Sub-Saharan Africa and more than 50% of GDP in MENA. In India, more than 40 percent of the capital stock is state-owned. Heavily represented in infrastructure, finance, and energy sectors, state-firms are often two to three times less productive than private firms. Their lack of investment capital affects the delivery of critical infrastructure services while their losses are a fiscal burden. High levels of state ownership also create negative perceptions of the overall investment climate.

So what should we do about it? How can we improve their performance? When should you privatize vs. when should you reform? How can market discipline be brought to bear on state enterprises, and how can their corporate governance be improved? Join in on our current online discussion and let us know what you think. So far 28 comments are up.

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