ADB State-Owned Enterprise Reform Pacific Private Sector Policy Brief

This publication analyzes the benefits of the commercialization of state-owned enterprises (SOEs). The author argues that commercialization typically results in a fall in costs, greater efficiency and better economic outcomes because it forces SOE performance to be better measured by results. Commercialization also results in greater transparency and accountability, which incentivizes managers to lead in a way that maximizes an SOE's value. The paper concludes by arguing that either partial or full privatization is the next step after commercialization, and reaps greater economic rewards.