A reappraisal of the role of public enterprises in less developed countries

Abstract

The role assigned to public enterprises is related to the type of development strategy pursued by less developed countries. The potential net benefits associated with state enterprises will be high when an industrialization strategy requires the establishment of large‐scale, capital‐intensive basic industries. Their role should be reappraised where they fail to realise their potential net benefits and where the emphasis of development strategy shifts to the alleviation of poverty. Measures designed to improve the efficiency of state enterprises need not conflict with programmes to provide basic needs and develop appropriate technology. State participation in these programmes is best effected through institutions specifically formed to promote their objectives.

Notes

Lecturer, Department of Economics, Rhodes University, Grahamstown, South Africa.