OECD Corporate Governance Working Papers

OECD Corporate Governance Working Papers provide timely analysis and information on national and international corporate governance issues and developments, including state ownership and privatisation policies. The working paper series is designed to make select studies by the OECD Corporate Governance Committee, OECD staff members and outside consultants available to a broad audience.


Competitive Neutrality and State-Owned Enterprises in Australia

Review of Practices and their Relevance for Other Countries

This working paper provides a comprehensive overview of the competitive neutrality framework of the Australian Commonwealth as well as individual States. It reviews the history behind the framework and provides examples of cases brought before the respective complaints handling offices. Finally, the paper draws conclusions regarding the successes and failures of the Australian framework and its applicability to other jurisdictions. The working paper argues that Australia.s competitive neutrality framework can be viewed as highly successful overall. However, the success can probably only be copied by other countries if these are willing to undertake similarly profound reforms as were engendered as part of the Australian competition reforms in the 1990s with the active participation of the Productivity Commission. The factors behind Australia.s apparent success include: a reform program that applied both to SOEs and to specific industries; the flexibility to apply the framework differently in different geographic contexts; anchoring the commitment to competitive neutrality in strong administrative processes; regular reviews and reporting by individual jurisdictions on the progress of their reforms; clarity in communication to enhance a nationwide understanding of the goals and mechanisms to achieve those goals; transparent public benefit tests to establish the boundaries between commercial and non-commercial public activities; and transparent and politically independent review processes.


Keywords: state-owned enterprises, competitive neutrality, competition policy, sectoral reforms, corporate governance, competitive advantages
JEL: G30: Financial Economics / Corporate Finance and Governance / Corporate Finance and Governance: General; L4: Industrial Organization / Antitrust Issues and Policies; G34: Financial Economics / Corporate Finance and Governance / Mergers; Acquisitions; Restructuring; Corporate Governance
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