REVIEW #7: Political Economy of State-Owned Enterprises in Poland

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Huge levels of state ownership in the Polish economy negatively affects its productivity and growth prospects. Although the employment share of state-owned enterprises (SOEs) in total employment of the Polish economy might seem limited (about 5%), their share among the largest, most important companies is much more significant.

Download full article: 08_POLITICAL ECONOMY OF STATE-OWNED ENTERPRISES IN POLAND_ALEKSANDER ŁASZEK

The role of SOEs should be a source of concern, as both the simple comparison of basic indicators and research reviews indicate that SOEs are less productive than their private counterparts. The reluctance of both the current and previous Polish governments to privatize SOEs means that they will continue to play an important role in the economy.

Overall Size of SOEs in Poland

Public corporations – despite their impact on competitiveness in the economy – are usually overlooked by traditional measures of the size of government. Measures such as government expenditures to GDP or public consumption concentrate on governmental units providing non-market services and transfers, but fail to consider market actors controlled by the government.

The best way to grasp the size of SOEs would be to look at the value created by public corporations. Unfortunately, although European System of Accounts (ESA 2010) distinguishes between public and private corporations, separate data for them are not reported in national accounts. What is reported by the Polish Statistical Office (GUS), however, is the structure of enterprise sector, divided into public (majority owned) and private companies (including those minority-owned by the government), but without distinction between market and non-market output.

In a majority of cases it is not a problem, as government-controlled non-market producers (schools, hospitals, administration, police, or military) are not organized as enterprises and, thus, are not reported as public companies. Still, some parts of the general government are incorporated (like PLK, the Polish Railway Company) and are reported in general government statistics and in corporation statistics. Thus, one cannot simply sum the employment provided by general government work and SOEs, as some of them are already included in general government statistics. Nevertheless, such cases are limited, and for the purpose of this article one can assume that employment in enterprises controlled by government is a rough proxy of public corporations.

Download full issue: SOS SOEs_REVIEW7_FULL

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