BUSINESSES OF THE STATE

The state, as an owner of businesses, is competing and collaborating with the private sector at the firm level, market level, and economy-wide, which has profound implications for investment and growth. Governments actively participate in commercial markets in different forms, from controlling the production of goods and services to investing in firms as a minority shareholder. The impact of state participation in markets on an economy's growth depends on the type of public-private ownership, the types of markets, and the importance of those markets in the economy. The impact also depends on how policies and institutions regulate businesses with state ownership and the markets in which they are active. This report uses new evidence to update the understanding of how different ownership arrangements across sectors and institutional settings affect private investment, productivity, technology adoption, and job creation, and also how those arrangements influence the ability of economies to respond to shocks, from pandemics to climate change.