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Re: States and enterprises

Posted by Kevin Smith on September 14, 1999 at 14:39:32:

In Reply to: States and enterprises posted by Naa Norle Lokko on November 16, 1998 at 09:56:45:

: From the readings on China, I think its pretty clear that enterprises do very
: well when they are under private ownership. I'm yet to see a country where
: government-controlled enterprises compete at the same level as private enterprises.
: Even though the Chinese government was allowing firms to retain some of their profits
: and to have some degree of autonomy, the fact still remains that the government was
: still very much involved in the operations of state owned enterprises. I do agree with
: Huang and Kalirajan and others that planned production does have a negative impact on
: growth of output. The government cannot go on granting subsidies to loss-making enterprises.
: It only encourages inefficiency. I get the sense that the Chinese government is trying to get
: the best of two worlds - a mix of a centrally planned and a market economy. I don't think that's
: possible. What do you think?

The town village enterprises in China have the fastest growth rates in the country and they are all publicly owned. I don't think it is ownership but control and accountability that matters. What do you think?


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