Corporate governance and democratic accountability: local state-owned enterprises in Norway

Abstract

Transferring public service provision to state-owned enterprises (SOEs) raises concerns over accountability deficits. We argue that the governance of SOEs requires reconciliation of the accountability relations found in traditional models of public administration, and the normative structures of control and accountability developed in the world of private enterprises, commonly referred to as corporate governance. To this end, we propose a model for structuring accountability relations between SOEs and governmental owners. The model prescribes a distinction between the roles of elected representatives and top managers as “forums” for accountability concerning the governmental owner’s mission-related and non-mission-related preferences towards the SOE. The model’s relevance is tested empirically using data from a study of SOEs in Norway’s local government sector. The analysis indicates that accountability practices in line with the prescriptions of the model were associated with a heightened sense of control over the SOEs.