184th mBank-CASE Seminar
March 20, 2025, 3:00 PM – 4:30 PM
Why Do We Still Need Privatization?
The event will be held in Polish.
Speakers:
Dr. Ewa Balcerowicz
Chair of the Board of the CASE – Center for Social and Economic Analysis
Introduction
Dr. hab. Piotr Kozarzewski
Professor at the Faculty of Economics, Maria Curie-Skłodowska University in Lublin
Privatization in the Shadow of Group Interests
Prof. Dr. hab. Maciej Bałtowski
Maria Curie-Skłodowska University in Lublin
Privatization Assets in Poland in an International Comparison
Dr. Małgorzata Starczewska-Krzysztoszek
Polish Economic Society
State Owner – Management – Enterprise. A Discretionary Utility Triangle?
About the Seminar:
The privatization of state-owned enterprises—alongside the organic growth of private businesses—was a driving force behind Poland’s economic development for nearly the first two decades following the systemic transformation of 1989-1990. However, privatization later lost momentum, and since 2016, instead of further privatization, Poland has witnessed the nationalization of some large private companies under the guise of “repolonization.”
A report published by the Ministry of State Assets in November 2023 (at the time led by Minister Jacek Sasin from the Law and Justice Party, PiS) described previous privatization policies as a “sell-off of national assets.” The report, titled “State Treasury Companies: Actions and Results, 2016-2023,” is an unusual defense of state ownership in the economy. Furthermore, the Ministry of State Assets—created in November 2019 to replace the Ministry of Treasury—has no mention of privatization in its mandate, instead focusing on “protecting State Treasury interests” and “implementing the state’s economic policy.”
As of 2016, Poland had the highest share of state ownership in the economy among post-socialist EU countries. State-owned enterprises accounted for 17% of GDP and employed 13% of workers. In Europe, only Russia and Belarus had a larger state sector in terms of GDP share, while Bosnia, Russia, Belarus, and Ukraine had a larger state sector in terms of employment (IMF data, 2019). Since then, with the renationalization efforts under PiS and the establishment of new state-owned entities, the state sector in Poland has expanded even further.
It is, therefore, high time for Poland to return to privatization—which has effectively been halted.
At the seminar:
Dr. Piotr Kozarzewski will present the historical shift away from completing the privatization of state-owned enterprises in Poland as a critical lesson in the risks associated with economic policy. He argues that the main driver behind the halt of privatization was that it reduced the resources available for politicians to serve their group interests. The ideological claim that privatization was merely a “sell-off of national assets” is untenable. Unlike in many other post-communist countries, Poland’s well-managed privatization processes and the establishment of effective market mechanisms prevented privatization from becoming a rent-seeking tool for political elites and their business allies.
Prof. Maciej Bałtowski (UMCS) will present findings from original empirical research covering the 36 largest global economies. One key conclusion is that the share of state-controlled enterprises among the largest domestic firms in Poland is the highest among developed countries. Since the 2007-2008 financial crisis, this share has remained persistently high in Poland, whereas in most other countries, it has declined.
Dr. Małgorzata Starczewska-Krzysztoszek (TEP) has observed surprising and non-transparent changes in the management boards of state-owned companies (SOEs) over the past two months—despite the new government’s earlier declarations about professionalizing SOE management. She argues that Poland is still far from achieving the “highest standards of corporate governance” and will explain the reasons behind this. State-owned enterprises account for over 2% of all medium and large enterprises in Poland—significant for an owner (the state) that, if at all involved in economic activity, should do so minimally, given its role as both a market regulator and an entity lacking business competencies. Control over strategic economic infrastructure and critical industries can be ensured through other means, such as legislation governing investment oversight. The author concludes that:
- The state’s (or, effectively, politicians’) control over the economy should be reduced by at least 90% in quantitative terms.
- In the remaining 10% of enterprises where the state retains ownership or co-ownership, what is needed is not just a Code of Good Governance for State Ownership Supervision, but a Code of Good Practices for the State as an Owner.
