DOI:
https://doi.org/10.31063/2073-6517/2020.17-1.2
For citation:
Bratchenko, S.A. (2020). Methodological Aspects Efficiency of State Property Administration. Zhurnal Economicheskoj Teorii [Russian Journal of Economic Theory], 17 (1), 17-32
Abstract:
The main argument of the ongoing privatization of state property is lower profitability of state-owned companies (organizations) compared to private. The paper shows that the state interests are not reduced to the sum of the interests of its citizens (according to the principle of methodological individualism, which is one of the basic principles of liberal doctrine). The goals of the state and the goals of business are significantly different, and therefore the purpose of the activities of state organizations is not to increase the profitability of the latter. The main purpose of state property is the realization of state interests and the performance of state functions, goals and objectives. Therefore, it is methodologically incorrect to use private business performance criteria to the assessment of state-owned organizations’ activity. Moreover, it is shown that improving profitability organizations is contrary to state interests for a certain class of state property. The use of the commercial approach is one of the reason low-quality of state property management.