| Author(s) | Abdulrahman O. Al-Barrak and Mohammed A. Al-Harran |
| Affiliation | Assistant Professors, Department of Public Administration, King Saud University, Riyadh, Saudi Arabia |
| Title | The Debated Relationship between Privatization and Efficiency in Saudi Public Enterprises |
| Source | Journal of King Saud University. Administrative Sciences. Volume 17, No 1. (2005/1425) |
| Abstract | The purpose of this study is threefold: 1- identifying the main obstacles that face public enterprises in Saudi Arabia; 2- identifying the relationship between privatization and efficiency; and 3- discussing whether privatization is the best and only cure for deteriorating levels of efficiency in public enterprises. The study finds that public enterprises face many problems that center around their relationship with other governmental organizations. Stated differently, the main barrier facing public enterprises is the lack of adequate autonomy to run their business on a commercial/economic basis, as their charter states. The study finds that the relationship between privatization and efficiency is neither absolute nor unlimited. Competition and market forces are the important factors in determining the level of efficiency, not the form of property. Moreover, by reviewing previous studies, there is no statistically significant proof that a positive correlation exists between privatization and efficiency. The study, therefore, reaches the conclusion that privation, as a policy option, is one of the, and not necessarily the best, solutions because most public enterprises will remain under public ownership due to political, economic, or social reasons. Even if some enterprises are privatized, the regulating role of the state will remain absolute. |
