The state and public corporations

Abstract

Public corporations are created when public services are transformed into corporations via corporatization. But what are the consequences of corporatization, and does it make public service privatization more likely? This chapter presents and critically interprets the two main bodies of theoretical scholarship on corporatization which offer different perspectives on this question. It then examines the nature of corporatization, its evolution and its consequences. The authors find that, initially, corporatization proceeded rapidly during the 1980s, in the European Union (EU) telecommunications market, but then started to meet with some obstacles in other EU markets, such as energy. Corporatization was promoted around the world by international organizations, including the Organisation for Economic Co-operation and Development (OECD) and the World Bank. In the 2000s, corporatization spread to the health and education sectors. However, despite the efforts of its promoters, corporatization has spread slower than its proponents would perhaps desire, not least because the uniform recipe created is a poor fit for the economic realities of diverse countries around the world.

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