Public Corporations:

• Owned wholly and solely by the state or central government
• Usually are businesses which have been nationalized
• Government does not directly operate the business and rather allocates a Board of Directors

• Social Objectives:
  Try to keep prices low
  Try to keep unemployment low
  Try to provide a service

• Recently, however, they are reducing subsidies and operating more like a private sector business (corporation) due to the losses they were making. They have been given more objectives which include:
  reduce costs even if that means unemployment
  increase efficiency and work more like a private sector business
  close loss-making services

• This policy of reducing subsidies and operating more like a private sector business is sometimes called corporatization

Advantages/Reasons:

• Some industries are too important to be run by the private sector
• Provision of important public services
• Natural monopolies made- wasteful to have competitors & no abuse of market power
• Secure jobs

Disadvantages:

• Lack of incentive
• May be used for wrong reasons (political reasons)
• Less efficiency

Municipal Enterprises

• Free or very low costing services and goods provided by the government