Why create government corporations? An examination of the determinants of corporatization in the Canadian public sector

Abstract

Abstract Public corporations have grown in popularity over the last 30 years, but the conditions that lead governments to create them are still debated. In this study, we draw on an original dataset of public organizations at the federal and provincial levels in Canada to test the prevalence of corporatization and the conditions associated with the creation of public corporations. Our results show that corporatization has been an important phenomenon in Canada over the last 30 years, but that the creation of public corporations is not associated with pressures on public finances or favored by right‐wing governments. Our main finding is that the creation of public corporations is mainly associated with administrative capacity. Our results suggest that corporatization may be more a pragmatic exercise in state‐building than an ideological or New Public Management (NPM)‐driven project, but that its cost or complexity may make it more accessible to larger administrations.

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