State-Owned Enterprises, Soft Budget Constraints and the Owner-Regulator Syndrome

Authors: Davis, J.; Keiding, H.

Source: Acta Oeconomica, Volume 52, Number 2, 19 July 2002 , pp. 221-235(15)

Publisher: Akademiai Kiado

Buy & download fulltext article:

OR

Price: $22.84 plus tax (Refund Policy)

Abstract:

We look at the soft budget constraint literature in the context of the state-led restructuring of state-owned enterprises (SOE) in which institutions are both regulators charged with constraining SOE restructuring outcomes and part owners of the SOEs concerned. Such institutional agents constitute a set of what we term “owner-regulators (OR)”. These economic agents may have political problems as regulators - as suggested by the Chicago School approach to economic regulation. They can also have ownership problems - here defined by literature on the theory of the firm and on vertical structure. In this light the incentives associated with the imposition of hard budget constraints may be by themselves insufficient to radically change owner-regulator behaviour. If the implementation of such constraints does not take into account the factors highlighted by this paper, hard budget constraints are likely to be either counterproductive or irrelevant.

Keywords: corporate governance; regulatory policy; state enterprise restructuring; transition economies

Document Type: Research Article

Publication date: July 19, 2002

More about this publication?
  • Terms & Conditions
  • ingentaconnect is not responsible for the content or availability of external websites
Related content

Tools

Key

Free Content
Free content
New Content
New content
Open Access Content
Open access content
Subscribed Content
Subscribed content
Free Trial Content
Free trial content

Text size:

A | A | A | A
Share this item with others: These icons link to social bookmarking sites where readers can share and discover new web pages. print icon Print this page