The Rise and Decline of Public Enterprises in Western Democracies

Abstract

Public enterprises, especially public utilities, played an important role in economic and social policy during the first three decades after the Second World War. With the rise of the neoliberal paradigm in the 1980s, state involvement in economic affairs was challenged and the privatization of state-owned firms moved to the top of national political agendas. However, there were significant cross-national differences, both in the historic involvement in business affairs and in the degree to which governments retreated from entrepreneurial activities. In this chapter, we trace and explain this variation, examining the factors responsible for the emergence and decline of public enterprises in the Western world between circa 1850 and 2007, with an emphasis on public utilities.