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dc.titleFixing State-Owned Enterprises: New Policy Solutions to Old Problems
dc.contributor.authorMusacchio, Aldo
dc.contributor.authorPineda, Emilio
dc.contributor.authorHuber, John
dc.contributor.authorJara, Mauricio
dc.contributor.authorKim, Hyungon
dc.contributor.authorTer-Minassian, Teresa
dc.contributor.authorWagner, Rodrigo
dc.contributor.editorMusacchio, Aldo
dc.contributor.editorPineda, Emilio
dc.contributor.orgunitFiscal Management Division
dc.coverageBrazil
dc.coverageDominican Republic
dc.coverageMexico
dc.coveragePeru
dc.coverageArgentina
dc.coverageUruguay
dc.coverageChile
dc.coverageJamaica
dc.coverageGuatemala
dc.coverageParaguay
dc.coverageNicaragua
dc.coverageRepublic of Korea
dc.coverageLatin America and the Caribbean
dc.date.available2019-11-21T00:00:00
dc.date.issue2019-11-21T00:11:00
dc.description.abstractThe situation of state-owned enterprises (SOEs) in Latin America and the Caribbean continues to be dire. This book uses an original database of SOE performance that shows that every year about one-third of such enterprises in the region report losses (up to 70 percent in some countries) and that they require between 0.3 and one percentage point of GDP in fiscal transfers to cover such losses. Countries in the region have adopted centralized agency monitoring of their SOEs, managed to reduce the fiscal burden of SOEs, shown better financial returns, and accumulated less liabilities to GDP, thus generating less fiscal risk for the government overall. Each of the chapters provides a practical way to solve either asymmetry of information problems in the monitoring of SOEs or solutions to reduce the discretionary nature of the fiscal governance of SOEs. Chapter 2 details the kinds of fiscal risks and contingent liabilities that SOEs create for governments and provides a set of controls to limit those risks. Chapter 3 shows that allowing SOEs to issue bonds has been an ineffective way of hardening their budget constraint, given that investors price those bonds at a discount. Chapter 4 presents a state-contingent financial instrument that allows investors to value an SOE. Chapter 5 provides empirical evidence on the advantages of SOE centralized monitoring agencies in Latin America and the Caribbean, highlighting Chile, Peru, and Paraguay. Chapter 6 examines the experience of East Asian countries with holding companies and discusses when holding companies are a better vehicle to control SOEs. Chapter 7 suggests ways to align the incentives of politicians and SOE managers to provide better goods and services. Finally, Chapter 8 provides a practical guide to improve the monitoring of SOEs and to design a centralized monitoring agency.
dc.format.extent259
dc.identifier.doihttp://dx.doi.org/10.18235/0002012
dc.identifier.isbn9781597823715
dc.identifier.urlhttps://publications.iadb.org/publications/english/document/Fixing_State-Owned_Enterprises_New_Policy_Solutions_to_Old_Problems_en.pdf
dc.language.isoen
dc.mediumAdobe PDF
dc.publisherInter-American Development Bank
dc.subjectFiscal Policy
dc.subjectPrivatization
dc.subjectFinancial Bond
dc.subjectCorporate Governance
dc.subject.jelcodeH11 - Structure, Scope, and Performance of Government
dc.subject.jelcodeH77 - Intergovernmental Relations • Federalism • Secession
dc.subject.jelcodeH50 - National Government Expenditures and Related Policies: General
dc.subject.jelcodeG30 - Corporate Finance and Governance: General
dc.subject.keywordsLatin America; state-owned enterprises; privatization; state reform; corporate governance
dc.typeBooks
idb.identifier.pubnumberIDB-BK-00220
idb.operationRG-T2566
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