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45-691: British Shipbuilders (BS) was a public corporation that owned and managed the shipbuilding industry in Great Britain from 1977 through the 1980s. Its head office was at Benton House in Newcastle upon Tyne , England. The corporation was founded as a result of the Aircraft and Shipbuilding Industries Act 1977 , which nationalised 27 major shipbuilding and marine engineering companies in Great Britain. A further six ship repair companies and

90-659: A shell corporation in statute, in order to be accountable for any liabilities incurred during its operational history, until it was abolished in 2013 as part of the Government's 2010 public bodies reforms . From March 2013 any remaining liabilities of British Shipbuilders passed to the Department for Business, Innovation and Skills . The assets of the following companies vested in British Shipbuilders on 1 September 1977. Note: Harland and Wolff , Belfast

135-477: A further shipyard were also acquired by the corporation, with British Shipbuilders initially comprising 32 shipyards, six marine engine works and 6 general engineering plants. Collectively, British Shipbuilders accounted for 97% of the UK's merchant shipbuilding capacity, 100% of its warship-building capacity, 100% of slow speed diesel engine manufacturing and approximately 50% of ship-repair capacity. Harland & Wolff ,

180-415: A government owning all or a controlling stake of the company's shares . This form is often referred to as a state-owned enterprise . A state-owned enterprise might variously operate as a not-for-profit corporation , as it may not be required to generate a profit; as a commercial enterprise in competitive sectors; or as a natural monopoly . Governments may also use the profitable entities they own to support

225-661: A public objective. For that reason, SOEs primarily operate in the domain of infrastructure (e.g., railway companies), strategic goods and services (e.g., postal services, arms manufacturing and procurement), natural resources and energy (e.g., nuclear facilities, alternative energy delivery), politically sensitive business, broadcasting, banking, demerit goods (e.g., alcoholic beverages ), and merit goods (healthcare). SOEs can also help foster industries that are "considered economically desirable and that would otherwise not be developed through private investments". When nascent or 'infant' industries have difficulty getting investments from

270-495: A regular enterprise, state-owned enterprises are typically expected to be less efficient due to political interference, but unlike profit-driven enterprises they are more likely to focus on government objectives. In Eastern Europe and Western Europe , there was a massive nationalization throughout the 20th century, especially after World War II . In the Eastern Bloc , countries adopted very similar policies and models to

315-423: A specific state institution or branch of government, used exclusively by that branch, such as a research laboratory. The latter refers to assets and resources owned by the population of a state which are mostly available to the entire public for use, such as a public park (see public space ). In neoclassical economic theory , the desirability of state ownership has been studied using contract theory . According to

360-406: A whole. As such, state ownership is only one possible expression of public ownership, which itself is one variation of the broader concept of social ownership. In the context of socialism, public ownership implies that the surplus product generated by publicly owned assets accrues to all of society in the form of a social dividend , as opposed to a distinct class of private capital owners. There

405-550: Is a natural monopoly or because the government is promoting economic development and industrialization . State-owned enterprises may or may not be expected to operate in a broadly commercial manner and may or may not have monopolies in their areas of activity. The transformation of public entities and government agencies into government-owned corporations is sometimes a precursor to privatization . State capitalist economies are capitalist market economies that have high degrees of government-owned businesses. Public ownership of

450-416: Is a process of transferring private or municipal assets to a central government or state entity. Municipalization is the process of transferring private or state assets to a municipal government. A state-owned enterprise is a commercial enterprise owned by a government entity in a capitalist market or mixed economy . Reasons for state ownership of commercial enterprises are that the enterprise in question

495-562: Is a viable argument for SOEs is debated. SOEs are also frequently employed in areas where the government wants to levy user fees , but finds it politically difficult to introduce new taxation. Next, SOEs can be used to improve efficiency of public service delivery or as a step towards (partial) privatization or hybridization. SOEs can also be a means to alleviate fiscal stress, as SOEs may not count towards states' budgets. Compared to government bureaucracy, state owned enterprises might be beneficial because they reduce politicians' influence over

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540-416: Is a wide variety of organizational forms for state-run industry, ranging from specialized technocratic management to direct workers' self-management . In traditional conceptions of non-market socialism, public ownership is a tool to consolidate the means of production as a precursor to the establishment of economic planning for the allocation of resources between organizations, as required by government or by

585-764: Is approximately 70% of total employment. State-owned enterprises are thus a major factor behind Belarus's high employment rate and a source of stable employment. In most OPEC countries, the governments own the oil companies operating on their soil. A notable example is the Saudi Arabian national oil company , Saudi Aramco , which the Saudi government bought in 1988, changing its name from Arabian American Oil Company to Saudi Arabian Oil Company. The Saudi government also owns and operates Saudi Arabian Airlines , and owns 70% of SABIC as well as many other companies. China's state-owned enterprises are owned and managed by

630-469: Is contestable under what circumstances a SOE qualifies as "owned" by a state (SOEs can be fully owned or partially owned; it is difficult to determine categorically what level of state ownership would qualify an entity to be considered as state-owned since governments can also own regular stock , without implying any special interference). Finally, the term "enterprise" is challenged, as it implies statutes in private law which may not always be present, and so

675-563: Is desirable. In their model, the government and a private firm can invest to improve the quality of a public good and to reduce its production costs. It turns out that private ownership results in strong incentives to reduce costs, but it may also lead to poor quality. Hence, depending on the available investment technologies, there are situations in which state ownership is better. The Hart-Shleifer-Vishny theory has been extended in many directions. For instance, some authors have also considered mixed forms of private ownership and state ownership. In

720-617: Is highlighted in the predominant local terminology, with SOEs in Canada referred to as a " Crown corporation ", and in New Zealand as a " Crown entity ". The term " government-linked company " (GLC) is sometimes used, for example in Malaysia , to refer to private or public (listed on a stock exchange) corporate entities in which the government acquires a stake using a holding company . The two main definitions of GLCs are dependent on

765-452: Is the ownership of an industry , asset , property , or enterprise by the national government of a country or state , or a public body representing a community, as opposed to an individual or private party . Public ownership specifically refers to industries selling goods and services to consumers and differs from public goods and government services financed out of a government's general budget . Public ownership can take place at

810-715: The State-owned Asset Supervision and Administration Commission (SASAC) . China's state-owned enterprises generally own and operate public services, resource extraction or defense. As of 2017 , China has more SOEs than any other country, and the most SOEs among large national companies. China's SOEs perform functions such as: contributing to central and local governments revenues through dividends and taxes, supporting urban employment, keeping key input prices low, channeling capital towards targeted industries and technologies, supporting sub-national redistribution to poorer interior and western provinces, and aiding

855-423: The means of production is a subset of social ownership , which is the defining characteristic of a socialist economy. However, state ownership and nationalization by themselves are not socialist, as they can exist under a wide variety of different political and economic systems for a variety of different reasons. State ownership by itself does not imply social ownership where income rights belong to society as

900-436: The national , regional , local , or municipal levels of government; or can refer to non-governmental public ownership vested in autonomous public enterprises . Public ownership is one of the three major forms of property ownership, differentiated from private, collective / cooperative , and common ownership . In market-based economies, state-owned assets are often managed and operated as joint-stock corporations with

945-498: The Hart-Shleifer-Vishny model it is assumed that all parties have the same information, while Schmitz (2023) has studied an extension of their analysis allowing for asymmetric information . Moreover, the Hart-Shleifer-Vishny model assumes that the private party derives no utility from provision of the public good. Besley and Ghatak (2001) have shown that if the private party (a non-governmental organization) cares about

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990-823: The Minister of Finance II, the Minister in the Prime Minister's Department in charge of the Economic Planning Unit, the Chief Secretary to the Government, Secretary General of Treasury and the heads of each of the GLICs (the Employees Provident Fund, Khazanah Nasional Berhad , Lembaga Tabung Angkatan Tentera (the armed forces pension fund), Lembaga Tabung Haji and Permodalan Nasional Berhad . Khazanah Nasional Berhad provided

1035-1019: The USSR. Governments in Western Europe, both left and right of centre, saw state intervention as necessary to rebuild economies shattered by war. Government control over natural monopolies like industry was the norm. Typical sectors included telephones , electric power , fossil fuels , iron ore , railways , airlines , media , postal services , banks , and water . Many large industrial corporations were also nationalized or created as government corporations, including, among many others: British Steel Corporation , Equinor , and Águas de Portugal . A state-run enterprise may operate differently from an ordinary limited liability corporation. For example, in Finland, state-run enterprises ( liikelaitos ) are governed by separate laws. Even though responsible for their own finances, they cannot be declared bankrupt ;

1080-528: The end of 1982, British Shipbuilders had closed half of its shipyards in an effort to reduce over-capacity. The terms of the British Shipbuilders Act 1983 then required the company to begin a process of privatising its remaining assets. The various divisions that had remained under integrated nationalised ownership were divested throughout the 1980s as the company wound up operations. The profitable warship-builders were sold off initially, with

1125-507: The form of Public Sector Undertakings (PSUs). The Malaysian government launched a GLC Transformation Programme for its linked companies and linked investment companies ("GLICs") on 29 July 2005, aiming over a ten-year period to transform these businesses "into high-performing entities". The Putrajaya Committee on GLC High Performance ("PCG"), which oversaw this programme, was chaired by the Prime Minister , and membership included

1170-467: The general budget. The creation of a state-owned enterprise from other forms of public property is called corporatization . In Soviet-type economies , state property was the dominant form of industry as property. The state held a monopoly on land and natural resources, and enterprises operated under the legal framework of a nominally planned economy , and thus according to different criteria than enterprises in market and mixed economies. Nationalization

1215-412: The leading application of the incomplete contract theory to the issue of state-owned enterprises. These authors compare a situation in which the government is in control of a firm to a situation in which a private manager is in control. The manager can invest to come up with cost-reducing and quality-enhancing innovations. The government and the manager bargain over the implementation of the innovations. If

1260-533: The means of production may be labelled state socialism . State ownership was recognized by Friedrich Engels in Socialism: Utopian and Scientific as, by itself, not doing away with capitalism, including the process of capital accumulation and structure of wage labor. Engels argued that state ownership of commercial industry would represent the final stage of capitalism, consisting of ownership and management of large-scale production and manufacture by

1305-604: The merchant shipyards sold off or closed on a piecemeal basis, culminating in the sale of Govan Shipbuilders to Kværner in 1988 and Ferguson Shipbuilders to the privatised marine engine builder, Clark Kincaid, in January 1989. British Shipbuilders finally ceased active shipbuilding operations in 1989, with the closure of its last shipyards: North East Shipbuilders Ltd.'s Pallion and Southwick Shipyards at Sunderland . The remaining assets of North East Shipbuilders Ltd. were then privatised. British Shipbuilders continued to exist as

1350-592: The negotiations fail, the owner can decide about the implementation. It turns out that when cost-reducing innovations do not harm quality significantly, then private firms are to be preferred. Yet, when cost-reductions may strongly reduce quality, state-owned enterprises are superior. Hoppe and Schmitz (2010) have extended this theory in order to allow for a richer set of governance structures, including different forms of public-private partnerships . SOEs are common with natural monopolies , because they allow capturing economies of scale while they can simultaneously achieve

1395-488: The only shipbuilder based in Northern Ireland was deemed to be a special political case and remained out of the control of the British Shipbuilders' management, despite it also being in state ownership from 1977. The same act nationalised the three large UK aerospace companies and grouped them in an analogous corporation, British Aerospace . The first Chairman of British Shipbuilders, serving from 1977 to 1980,

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1440-399: The private sector (perhaps because the good that is being produced requires very risky investments, when patenting is difficult, or when spillover effects exist), the government can help these industries get on the market with positive economic effects. However, the government cannot necessarily predict which industries would qualify as such 'infant industries', and so the extent to which this

1485-399: The property rights approach based on incomplete contracting (developed by Oliver Hart and his co-authors), ownership matters because it determines what happens in contingencies that were not considered in prevailing contracts. The work by Hart, Shleifer and Vishny (1997) is the leading application of the property rights approach to the question whether state ownership or private ownership

1530-428: The proportion of the corporate entity a government owns. One definition purports that a company is classified as a GLC if a government owns an effective controlling interest (more than 50%), while the second definition suggests that any corporate entity that has a government as a shareholder is a GLC. The act of turning a part of government bureaucracy into a SOE is called corporatization . In economic theory ,

1575-451: The question of whether a firm should be owned by the state or by the private sector is studied in the theory of incomplete contracts developed by Oliver Hart and his co-authors. In a world in which complete contracts were feasible, ownership would not matter because the same incentive structure that prevails under one ownership structure could be replicated under the other ownership structure. Hart, Shleifer, and Vishny (1997) have developed

1620-547: The secretariat to the PCG and managed the implementation of the programme, which was completed in 2015. As of 2024, Philippines Amusement and Gaming Corporation (PAGCOR) is the most profitable state-owned enterprise in the Philippines. It is the third largest contributor to government revenues, following taxes and customs. State ownership State ownership , also called public ownership or government ownership ,

1665-469: The service. Conversely, they might be detrimental because they reduce oversight and increase transaction costs (such as monitoring costs, i.e., it is more difficult and costly to govern and regulate an autonomous SOE than it is the public bureaucracy). Evidence suggests that existing SOEs are typically more efficient than government bureaucracy, but that this benefit diminishes as services get more technical and have less overt public objectives. Compared to

1710-465: The state answers for the liabilities. Stocks of the corporation are not sold and loans have to be government-approved, as they are government liabilities. State-owned enterprises are a major component of the economy of Belarus . The Belarusian state-owned economy includes enterprises that are fully state-owned, as well as others which are joint-stock companies with partial ownership by the state. Employment in state-owned or state-controlled enterprises

1755-484: The state's management policies, though these rights are not property rights as they are not transmissible. For example, if a family is allocated an apartment that is state owned, it will have been granted a tenancy of the apartment, which may be lifelong or inheritable, but the management and control rights are held by various government departments . There is a distinction to be made between state ownership and public property. The former may refer to assets operated by

1800-497: The state's response to natural disasters, financial crises and social instability. China's SOEs are at the forefront of global seaport-building, and most new ports constructed by them are done within the auspices of the Belt and Road Initiative . As of at least 2024, an Ethiopian SOE is Africa's largest and most profitable airline, as well as Ethiopia's largest earner of foreign exchange. In India , government enterprises exist in

1845-577: The state. Within the United Kingdom, public ownership is mostly associated with the Labour Party (a centre-left democratic socialist party), specifically due to the creation of Clause IV of the "Labour Party Manifesto" in 1918. "Clause IV" was written by Fabian Society member Sidney Webb . When ownership of a resource is vested in the state, or any branch of the state such as a local authority , individual use "rights" are based on

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1890-527: The state. State ownership is advocated as a form of social ownership for practical concerns, with the state being seen as the obvious candidate for owning and operating the means of production. Proponents assume that the state, as the representative of the public interest , would manage resources and production for the benefit of the public. As a form of social ownership, state ownership may be contrasted with cooperatives and common ownership. Socialist theories and political ideologies that favor state ownership of

1935-542: The term "corporations" is frequently used instead. Thus, SOEs are known under many other terms: state-owned company, state-owned entity, state enterprise, publicly owned corporation, government business enterprise, government-owned company, government controlled company, government controlled enterprise, government-owned corporation, government-sponsored enterprise , commercial government agency, state-privatised industry public sector undertaking, or parastatal, among others. In some Commonwealth realms , ownership by The Crown

1980-527: Was Admiral Sir Anthony Griffin . He was succeeded by Sir Robert Atkinson , who in turn was succeeded by Graham Day in 1984, Phillip Hares in 1986. The final operational chairman, John Lister, took office in 1987, continuing until 1989. The company was initially organised into four operating divisions: Merchant, Naval, Ship-repair, Marine Engineering and General Engineering. This was restructured into five trading divisions in 1980: Merchant Shipbuilding, Warship-building, Engineering, Ship-repair and Offshore. By

2025-440: Was state-owned but did not form part of British Shipbuilders. Government-owned corporation The terminology around the term state-owned enterprise is murky. All three words in the term are challenged and subject to interpretation. First, it is debatable what the term "state" implies (e.g., it is unclear whether municipally owned corporations and enterprises held by regional public bodies are considered state-owned). Next, it

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