World Bank. Bureaucrats in Business: The Economics and Politics of Government Ownership

Pakistan Development Review, Autumn, 1995 by Mir Annice Mahmood

World Bank. Bureaucrats in Business: The Economics and Politics of Government Ownership. Washington, D. C.: The World Bank. 1995. xix 346 pages.

The issue of efficiency in the public sector came to the fore some sixteen years ago when the international lending agencies and the developed world were of the view that privatisation of public assets would be a faster route to economic growth. Thus, in the light of international pressure, many developing countries have initiated privatisation programmes over the last decade and a half. However, the success of these privatisation/deregulation programmes has been mixed. Some developing countries have yet to initiate substantive privatisation programmes whereas other countries have introduced them only halfheartedly. This book by the World Bank is a policy research report about bureaucrats running public sector enterprises. The report highlights the successes and failures of privatisation programmes in a number of developing countries. Reforming state enterprises is a difficult task as a government has to face entrenched vested interests, particularly in the form of labour and management, whose discretionary powers are reduced when reform proceeds. The book not only lists the obstacles faced in reforming state enterprises but also highlights how these obstacles have been overcome by reform that has been successful.

The report also shows that where reform has been successful, trade and investment have increased, thus bringing about higher rates of economic growth. Although reform is shown to be desirable, the report also mentions a major shortcoming as to why reform has not been so widespread. The major obstacle identified is the political considerations involved when undertaking reform. Thus, to carry out successful reform, a thorough understanding of the political climate is necessary. This book attempts to identify and evaluate the components that contribute to the political constraints on reform, and this is its main strength.

Prepared by Mir Annice Mahmood, Book Review Editor.