Paul Sweeney criticises the idea of selling State-owned entities in today’s Irish Times: you can read his article here. Paul Sweeney’s contribution is incomplete. In particular, he does not fully address some key issues (I raise these points as questions, without having answers)
- Liquidity. If a government faces funding risk, selling valuable-but-illiquid assets may reduce the risk of a funding crisis.
- Ownership and firm performance. While Paul Sweeney highlights the potential inefficiencies of privatised firms, he does not have much to say about the possible inefficiencies of State-owned firms where the management or workforce may have objectives that are not fully aligned with the common good.
- Regulation. Where monopoly power is a severe problem, regulation is necessary. Can the Irish regulatory system be made more effective to ensure that sectors inhabited by monopoly-type firms deliver efficient outcomes? Does the identity of owners affect the effectiveness of regulation?
Paul Sweeney also highlights the increasing importance of State-owned firms in Asia, Russia and Latin America. It would be good to know the exact lessons to be drawn for countries such as Ireland from this development.