Public Management and Administration - Owen E.hughes

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Public Enterprise 111 in practice and have led to governments reducing their reliance on public enterprise as an instrument of policy. There are really two options for the future. The first is to improve the sector, aiming for greater efficiency and better public control, hopefully permitting enterprises some independence, while retaining the benefits of public ownership. Improvements can be made, particularly in accountability, and public enterprise can continue. The second perspective is that whatever is done, public enterprise is still just that, public and enterprise and from this inherent conflict between government and market stems inefficiency and the endemic problems of accountability. The option then is to dispose of assets. There were some public enterprises that could be privatized with little adverse effect. There seems little point in hindsight for governments owning banks, insurance companies or airlines. On the other hand, the privatization of public utilities has not reduced demands on government to regulate them. In many countries there were political consequences long after the relevant utilities were taken from the public sector. Indeed, there was little public support or political pressure in favour of privatization, but governments saw the opportunity to raise some discretionary income. This was probably a more important motivation than ideology. The response of most governments to the question of public enterprise has been to privatize in those circumstances where it could be done, so to a great extent, the experiment with government ownership of enterprises is finishing. There may even be benefits for consumers in the long run, although they have been slow in arriving. The public enterprise sector is interesting for public management as a topic in its own right, and also as the area of government to change the most dramatically over the 1980s and 1990s. Economic theorists carried out studies which purported to show that public enterprises were inherently less efficient than private enterprise. Although the evidence was mixed and far from conclusive, this change in theory led to the adoption of policies by governments to reduce or even eliminate enterprises from the public sector. The full effects of this are not yet apparent, although when privatization has been carried out hastily and with insufficient thought as to the regulatory and competitive environment, outcomes for consumers have not been markedly better. Perhaps there is a lesson in this for public management in general. The privatization of public enterprise may be a general test case for the whole public sector, but it is one which shows that care needs to be taken in developing clear objectives, and implementation is crucial for desirable outcomes. In the final analysis it seems difficult to see any long-term future for the public enterprise sector in any advanced or developing country, especially for those enterprises supplying goods or services on a large scale. There may be a continued existence for smaller enterprises or ones set up in cooperation with the private sector, but that will be all. The reduction of the public enterprise sector in the 1980s and 1990s says something about the public sector in general. The fact that government entities may have lasted a long time is no guarantee of
112 Public Management and Administration continued existence. The shrinking of government through privatization occurred through a process of economic theory feeding into policy-making. The same process is occurring in the core public sector, where the results may be even more significant than in the once-important public enterprise sector. Except for small-scale activities, it is likely that public enterprise will eventually disappear as an acceptable way of delivering private goods and services.
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Public Management and Administratio
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Also by Owen E. Hughes AUSTRALIAN P
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© Owen E. Hughes 1994, 1998, 2003
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Preface Over the past 20 years the
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viii Preface the Colorado link such
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3 Public Management Introduction Th
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10 E-government Introduction In the
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11 Managing External Constituencies
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12 Public Management in Developing
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13 Accountability Introduction The
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14 Conclusion: A New Paradigm for P
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284 References Borins, Sandford (19
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286 References Glor, Eleanor D. (20
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288 References Jordan, Grant (1997)
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290 References Monroe, Kristen Renw
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292 References Putt, Allen C. and S
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294 References Wilson, Graham K. (1
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296 Index bureaucracy 1-5, 9, 15-43
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298 Index information and communica
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300 Index ‘one best way’ thinki
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302 Index Ritter, G. 85, 86 role of
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Public Management and Administration - Owen E.hughes

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