In each of the following examples, what are the significant differences between

Question

In each of the following examples, what are the significant differences between government-owned and nongovernment-owned enterprises? Why do you think the government owns the enterprises mentioned? What different forms does competition take inthe case of government-owned enterprises? In what different ways do they operate because of their government ownership?

A) Investor-owned utilities and utilities owned by states or municipalities.

B) State coleges and private colleges

C) City owned intraurban bus companies and interurban bus companies such as Greyhound and Trailways

D) Forest Service campgrounds and privbatley owned campground.

E) Public libraries and private bookstores.

Explanation / Answer

A government-owned corporation, state-owned company, state-owned enterprise, state-owned entity, state enterprise, publicly owned corporation, government business enterprise, commercial government agency, public sector undertaking or parastatal is a legal entity that undertakes commercial activities on behalf of an owner government. Their legal status varies from being a part of government to stock companies with a state as a regular stockholder. There is no standard definition of a government-owned corporation (GOC) or state-owned enterprise (SOE), although the two terms can be used interchangeably. The defining characteristics are that they have a distinct legal form and they are established to operate in commercial affairs. While they may also have public policy objectives, GOCs should be differentiated from other forms of government agencies or state entities established to pursue purely non-financial objectives.[1]

Government-owned corporations are common with natural monopolies and infrastructure such as railways and telecommunications, strategic goods and services (mail, weapons), natural resources and energy, politically sensitive business, broadcasting, demerit goods (alcohol) and merit goods (healthcare).

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