Privatizing state‐owned enterprises: a model for developing countries

Abstract

Purpose

This paper aims to describe a planning and implementation model for privatizing state‐owned enterprises (SOEs) in developing countries.

Design/methodology/approach

The privatization model, developed within the context of selection, transition, and sustainability phases, identifies certain SOEs and how they transition into privatized firms that are socially responsible and contribute to economic development. Illustrative examples and cases drawn from the Pakistani privatization experience demonstrate how the model applies various frameworks.

Findings

The active support of key stakeholders is essential for privatization in developing countries to succeed. Targeted marketing strategies, together with financial considerations and public sector initiatives and oversight, can bolster successful implementation of privatization objectives and initiatives.

Practical implications

Privatization of failed or poorly performing SOEs into viable private sector firms can improve market efficiencies, reduce government deficits, offer better service alternatives, meet public service expectations, and promote economic development. Privatization also improves resource use and fosters collaboration between the public and private sectors.

Originality/value

The paper fills a literature gap by presenting an inclusive model that incorporates both public and private sector influences and considerations in the planning and implementation phases of privatization. It highlights the critical role of marketing in achieving success with private and public partnership initiatives.

Citation

Luqmani, M. and Quraeshi, Z. (2011), "Privatizing state‐owned enterprises: a model for developing countries", International Journal of Commerce and Management, Vol. 21 No. 3, pp. 256-272. https://doi.org/10.1108/10569211111165307