In Modules 3 and 4 we considered in some detail the ways in which governments attempt to regulate the activities of privately operated firms. An alternative to these methods of regulation is for the government to run the firms as public corporations or nationalised undertakings. Public enterprise has been an important feature of many economies especially in industries which have natural monopoly characteristics (see Module 3). It can also be observed in industries which are not natural monopolies, such as motor vehicles, coal mining or banking.
The aims of this module are as follows:
To consider the problems of defining and measuring the size of the public enterprise sector.
To chart the changes which have occurred in the size of the sector in some major economies.
To review the ‘public interest’ analysis of the role of public enterprises.
To compare the property rights structure of a public enterprise with that of a joint-stock private enterprise.
To analyse the various available mechanisms for controlling public enterprise behaviour and performance.
To consider the available evidence on the relative efficiency of public enterprise and alternative institutional forms.
