Public Enterprise in Less Developed Countries

The thesis

The ultimate goal of development should be a strong state, a strong economy, and a strong community. The new development strategies stress the need for a strong community, which conventional development strategies have tended to ignore. The new strategies compel attention to a basic dilemma of development: the potential conflict between the concentration of power in government and market organizations to promote development and the capacity of people, particularly the disadvantaged, to share responsibility for developmental changes in their own lives.

This chapter regards conventional roles of public enterprises and positivist notions of law as an instrument of the state as illustrative of this dilemma and as contributing to the weakening of the community. What is required to implement the new strategies is, first, the recognition that public enterprises are socially accountable and have as one of their roles the strengthening of the community, as well as the state and the economy.

To perform such a role, a public enterprise has to combine the advantages of a state agency and a community organization. This purpose is served by viewing the powers and resources vested in the public enterprise and bearing on the community's well-being as a developmental trust and the public enterprise as an institutional fiduciary subject to community, as well as state, controls. The fiducial form of public enterprise linking its state and community roles is the counterpart of the corporate form of public enterprise that links its state and market roles.