A policy analysis of state-owned enterprises : the case study of South African national road agency limited (SANRAL).

Abstract

State-Owned Enterprises (SOEs) are regarded as essential lubricants for socio-economic advancement not only in developing countries, but developed countries too. In developing countries, their history dates back to the colonial period where the state was essentially perceived to be the only entity with the necessary capacity to engineer development. Since their inception, SOEs have undergone different forms of public sector reforms. The emergence of the New Public Management in the 1980s, for example, saw the introduction of several forms of governance to improve the effectiveness and efficiency in the public sector. The commercialization of SOEs is often seen as a plausible technique to make SOEs more profitable. SOEs are government’s attempt to create state ownership in the economy, mobilizing private sector capital, reducing state debts and enhancing the capacity and competitiveness of the SOEs. On the other hand SOEs are criticized for their lack of accountability, transparency, poor performance and patronage. Research on SANRAL reveals that SOEs have the potential to bring about both positive and negative outcomes. The research on SANRAL further demonstrates that if properly managed, extraneous factors that limit positive outcomes of SOEs can be reduced.