The return of the hierarchy: SOEs in marketisation

Abstract

Purpose

The purpose of this paper is to contribute to the conceptualisation of state-owned enterprises (SOEs) as a mode of governance in marketisation via the perspective of historical institutionalism.

Design/methodology/approach

The paper is based on a qualitative case study of the marketisation of Danish passenger rail from the 1990s to date where marketisation has been set on hold since 2011 due to the activities of the SOE.

Findings

The paper shows that market governance was layered on the hierarchal governance of the SOE that was later turned into a hybrid governance mode through corporatisation. This layered set-up provided the state with a double governance grip that drove marketisation until 2011. However, the SOE as a hybrid created ripple effects between the market and the hierarchy that hampered the marketisation. The hierarchical governance turned towards centralisation and market governance was put on hold. The hybridity of the SOE was endogenously displaced via closing down of commercial activities, leading to a re-conversion of the SOE towards the hierarchical mode.

Originality/value

The paper contributes to the discussions about hybridity and re-centralisation in post-NPM era. It presents a case on how hybridity is altered and evolves in SOEs as a hybrid mode of governance between hierarchy and market in marketisation and how this can lead to re-centralisation.

Citation

Christensen, L.T. (2015), "The return of the hierarchy: SOEs in marketisation", International Journal of Public Sector Management, Vol. 28 No. 4/5, pp. 307-321. https://doi.org/10.1108/IJPSM-04-2015-0084