State-owned enterprises

Abstract

State-owned enterprises (SOEs) are often considered to be relics of twentieth century history. The transformation in the basic concept of SOE is closely linked to two major recent developments in Western capitalism. This chapter examines the process of change in the concept of SOEs and their impact in the making of global business. The traditional SOE was established and developed in a variety of circumstances. Ownership is closely related to control, and, for traditional SOEs in particular, the means a close interconnection with the national government. SOEs have assumed various organizational forms: government agencies, intermediaries between the agency and the business enterprise, and state-owned limited liability companies. In their country, SOEs had often a special political role as significant employers. International organizations began to be more negative about SOEs as of the late 1980s. In Italy, the formation of an SOE system was particularly affected by the lack of private capital.