Francis Fukuyama Quote
Most neoclassical economists would argue that state-owned firms will inevitably be less efficient than private ones because the state lacks the proper incentives to run enterprises efficiently. The state does not have to fear bankruptcy, since it can keep businesses going out of tax dollars or, at worst, by printing money. It also has strong incentives to use the firm for political ends like job creation and patronage. These deficiencies of public ownership have been the underlying justification for the global move toward privatization over the past decade. But state-owned enterprises can be run more or less efficiently, and any final judgment as to the efficiency price paid for nationalization has to be measured against the entrepreneurial capabilities of that society’s private sector. In France, nationalized companies have often been allowed considerable managerial discretion and operate not much differently from their private sector counterparts.36
Most neoclassical economists would argue that state-owned firms will inevitably be less efficient than private ones because the state lacks the proper incentives to run enterprises efficiently. The state does not have to fear bankruptcy, since it can keep businesses going out of tax dollars or, at worst, by printing money. It also has strong incentives to use the firm for political ends like job creation and patronage. These deficiencies of public ownership have been the underlying justification for the global move toward privatization over the past decade. But state-owned enterprises can be run more or less efficiently, and any final judgment as to the efficiency price paid for nationalization has to be measured against the entrepreneurial capabilities of that society’s private sector. In France, nationalized companies have often been allowed considerable managerial discretion and operate not much differently from their private sector counterparts.36
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About Francis Fukuyama
Fukuyama has been a senior fellow at the Freeman Spogli Institute for International Studies since July 2010 and the Mosbacher Director of the Center on Democracy, Development and the Rule of Law at Stanford University. In August 2019, he was named director of the Ford Dorsey Master's in International Policy at Stanford.
Before that, he served as a professor and director of the International Development program at the School of Advanced International Studies of Johns Hopkins University. He had also been the Omer L. and Nancy Hirst Professor of Public Policy at the School of Public Policy at George Mason University.
He is a council member of the International Forum for Democratic Studies founded by the National Endowment for Democracy and was a member of the Political Science Department of the RAND Corporation. He is also one of the 25 leading figures on the Information and Democracy Commission launched by Reporters Without Borders. In 2024, he received the Riggs Award for Lifetime Achievement in International and Comparative Public Administration.