Corporate Governance of SOEs
1. The SOE Dataset
2. Share of SOEs in the Economy
3. Share of SOEs in Economic Sectors
7. Capital Efficiency
8. Labor Efficiency
9. Output Quality
10. Contingent Liabilities
11. SOE Governance Performance
12. SOEGovernanceChallenges in Emerging Europe
, Bulgaria scores worst among available countries, followed by Romania. However, these indicators should be interpreted with caution as they reflect only selected dimension of SOE governance, and in both cases, the latest vintages are already slightly dated.
Figure 11. SOE Governance Performance
Country-specific SOEgovernancechallenges emerge in ownership policy, financial oversight, and board appointments . An extensive review of SOEgovernancechallenges and reform efforts in Emerging European countries included in this study points to three main areas of
State-owned enterprises (SOEs) play an important role in Emerging Europe’s economies, notably in the energy and transport sectors. Based on a new firm-level dataset, this paper reviews the SOE landscape, assesses SOE performance across countries and vis-à-vis private firms, and evaluates recent SOE governance reform experience in 11 Emerging European countries, as well as Sweden as a benchmark. Profitability and efficiency of resource allocation of SOEs lag those of private firms in most sectors, with substantial cross-country variation. Poor SOE performance raises three main risks: large and risky contingent liabilities could stretch public finances; sizeable state ownership of banks coupled with poor governance could threaten financial stability; and negative productivity spillovers could affect the economy at large. SOE governance frameworks are partly weak and should be strengthened along three lines: fleshing out a consistent ownership policy; giving teeth to financial oversight; and making SOE boards more professional.
ranks behind Bulgaria while Croatia scores more favorably.
Governance of SOEs
(higher denotes more restrictive)
Note: Degree of insulation of SOEs from market discipline and degree of political interference in the management of SOEs. Source: OECD Product Market Regulation Indicators (2013) .
19. Bulgaria’s main SOEgovernancechallenges stem from the overall ownership policy, financial oversight, and governance of SOE boards and CEOs . The following sub-sections address these issues in turn, each highlighting first the current challenges in Bulgaria
This paper highlights Bulgaria’s state-owned enterprises (SOEs) sector and to assess its performance in a regional perspective. A detailed and rich firm-level dataset of state-owned and private firms was compiled for this note to compare key performance indicators of SOEs to private firms in the same sector and to similar firms in Croatia and Romania for a regional comparison. In some network industries, such as energy, SOEs are heavily loss-making. Large amounts of debt have been piled up notably in the energy and transport sectors which, to the extent that it is classified outside the general government accounts, can pose significant risk to public finances in the form of contingent liabilities if the SOEs run into financial difficulties. SOE profitability and resource allocation efficiency largely lag private firms in the same sectors, even when isolating SOEs engaged in competitive market activities and hence classified outside of general government. Coupled with comparably poor output quality, these challenges have the potential to impair competitiveness and productivity across the economy.