What Do Citizens Think About Public Enterprises? Subjective Survey Data on the Legitimacy of the Economic Activities of the German Public Sector

Abstract

We analyse the legitimacy of public enterprises that perform economic activities by focusing on the citizens' subjective preferences, i.e. determining their political legitimacy. Using data from a representative survey conducted among 318 citizens of the German state of Rhineland-Palatine, we explore determinants for the support of either privatisation efforts or the instrumental thesis, a widespread principle in German-speaking countries, which considers public enterprises solely as instruments to fulfil economic policy objectives. Our results indicate that the respondents' perception of the efficiency of public enterprises as well as their personal economic situation are important factors for the support of privatisation. The influential factors for the use of public enterprises as policy instruments are political ideology, the perception of a higher security of supplying goods and services as well as opinions regarding corporate social responsibility. The subjective preferences of a (democratic) country's citizens are thus an important reason why the public sector should or should not play an active part in providing goods and services. This can play an important role when decision makers from the public sector are keen to take into account the citizens' approval or disapproval of privatisation measures.

Board behavior’s impact on entrepreneurial orientation in public enterprises

“…Second, although research on the relationship between the BoD and EO has recently attracted attention in private-sector research (e.g., Deman et al, 2018), this article illuminates the little-understood topic of board behavior and its influence on EO in public enterprises. By doing so, the study reveals a missing link between board strategy control and EO, thus addressing the widespread prejudice that a BoD dominated by politicians will have negative effects for the organization in question (e.g., Calabrò et al, 2013;Padilla-Angulo, 2020;Sidki & Boll, 2019;Sørensen, 2007). Third, despite the relevance of RDT in the public sector (Pfeffer & Salancik, 1978;Roberts & King, 1991), we support the idea for a fine-grained conceptualization (Casciaro & Piskorski, 2005).…”

“…Second, our study also presents a new perspective on board strategy control and its missing link with EO in the public sector. While private-sector studies already indicate the BoD control task has a positive effect on entrepreneurial posture and innovativeness (Deman et al, 2018;Gabrielsson, 2007;Gabrielsson & Politis, 2009), the public-sector research indicates a negative effect of a BoD composed predominantly of politicians (e.g., Calabrò et al, 2013;Padilla-Angulo, 2020;Sidki & Boll, 2019;Sørensen, 2007) and refers to a narrow state-control perspective (e.g., Lioukas et al, 1993;Smith, 2012). Although board members nominated by the local public owners seeming to be less involved in ratifying and monitoring the strategy of the enterprise is a concern-on the grounds that public-sector reforms seek to create a modern public-sector BoD largely aligned with classical models of corporate governance (Chambers & Cornforth, 2010) despite weak property rights and high transaction costs of local citizens-the missing link between strategy control and EO might be intentional.…”

How to eliminate the uncovered market: A duopoly model with government intervention

“…In other words, institutional effectiveness matters more than ownership. Not surprisingly, Sidki and Boll (2019), who examine this in Germany, indicate that people in the democratic German state of Rhineland‐Palatine appear to favour government action and intervention more than people in states under conservative rulers. Earlier theoretical studies, such as that by De Fraja (1993), show that the public sector is more productive than the private sector under certain circumstances, based on the principal‐agent model.…”