Why create government corporations? An examination of the determinants of corporatization in the Canadian public sector

Abstract

Public corporations have grown in popularity over the last 30 years, but the conditions that lead governments to create them are still debated. In this study, we draw on an original dataset of public organizations at the federal and provincial levels in Canada to test the prevalence of corporatization and the conditions associated with the creation of public corporations. Our results show that corporatization has been an important phenomenon in Canada over the last 30 years, but that the creation of public corporations is not associated with pressures on public finances or favored by right‐wing governments. Our main finding is that the creation of public corporations is mainly associated with administrative capacity. Our results suggest that corporatization may be more a pragmatic exercise in state‐building than an ideological or New Public Management (NPM)‐driven project, but that its cost or complexity may make it more accessible to larger administrations.

Economics, ideas or institutions? Agencification through government-owned enterprises in illiberal contexts: The case of Hungary

“…GOEs may also be used as a means of implementing economic policy such as the provision of specific goods and services and supporting national economic and strategic interests and social objectives (IMF, 2020;OECD, 2021). Furthermore, governments may prefer GOEs over public sector institutions because corporate entities are assumed to be more efficient than public ones (Bernier et al, 2022;Grossi and Reichard, 2008).…”

“…Such ideational forces (Pollitt and Bouckaert, 2011) may be highly relevant in the context of explaining the reliance of governments on CSAs (Bernier et al, 2022). In particular, political-organizational myths and administrative reform doctrines may have a significant explanatory power here.…”

“…Hungary has been exposed to one major economic and fiscal crisis in the observed period: the one that began in 2008. While there are several causal mechanisms crises may trigger with regard to CSAs (Bernier et al, 2022), one seems particularly relevant here.…”

Trends in the performance of arms‐length agencies in the Government of Canada

“…There are also numerous important dimensions of agencification not analyzed in this study, including accountability relationships and politicization, that are key to more completely understand the modern application of arms-length agencies in Canada. Furthermore, in the mould of Bernier et al (2021) and Hall (2021), there is much to be gained by comparative analysis of agencies across provinces in Canada to better understand their creation and evolution, partisan antecedents, and accountabilities.…”

“…Canada has always had arms‐length agencies and authorities, but, as in other countries, there has been substantial growth in the number of them since the 1990s (Bernier et al, 2021; Hall, 2021). This is generally attributed to the new public management (NPM) and neoliberal philosophies that aimed to dismantle key parts of the traditional public administrative state in pursuit of a more nimble, responsive and efficiency‐oriented government.…”