Governance and State-Owned Enterprises: How Costly is Corruption?

IMF Working Papers, November 22, 2019

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State-owned enterprises (SOEs) are present in key sectors worldwide and can provide an important public service.
Widespread concern exists that SOE activities are negatively affected by corruption, but there is limited cross-country analysis on the costs of corruption for SOEs.
New firm-level evidence across a large number of countries shows:
- SOEs perform as well as private firms in core sectors when corruption is low.
- SOE governance reforms can generate significant performance gains, based on a novel database of reforms.

Focus: impact of corruption on SOE performance; assessment of governance reforms for SOEs.
Data scope: firm-level data across a large number of countries; use of a novel database of reforms to identify effects of governance changes.
Subject tags from the page: Commodities, Corruption, Crime, Economic sectors, Electricity, Expenditure, Labor, Labor costs, Public enterprises, Public expenditure review
Keywords from the page: construction firm, Corruption, current ratio, Electricity, firm-level indicators, Global, governance reform, Labor costs, operating profit, private firm, Public enterprises, Public expenditure review, SOE conditionality, SOE performance, SOE reform, solid windowtext, WP

Reducing corruption can close performance gaps between SOEs and private firms in core sectors.
Implementing SOE governance reforms can yield significant performance improvements.
Cross-country firm-level analysis and reform databases are valuable tools for evaluating SOE policies and anticorruption efforts.

IMF Working Paper No. 2019/253 — Anja Baum, Clay Hackney, Paulo A Medas, Mouhamadou Sy (November 22, 2019).