Email this article 
Hide
Show all
Anatomy of the Privatization of State-Owned Enterprises (SOEs) in Ghana: Implication for Policy and Accountability
Abstract
With the administrative and operational functions of State-Owned Enterprises (SOEs) becoming increasingly complex and sophisticated among developing countries by the 1980s, privatization was recommended by the IMF/World Bank as a remedy to these institutional deficiencies . This is contingent on the neoclassical debate that private ownership rather than public ownership of management and operations of SOEs results in prudent policy process and accountability. Therefore, this study sought to assess the validity of this assertion by employing the Principal-Agent theory in assessing the level of accountability between the citizens (principal) and the government (agent) during private ownership of service delivery. As a qualitative study, this paper adopts unobtrusive content analysis of an empirical study of the privatization of Ghana Water Company Limited (GWCL). The government (agent) under the Principal-Agent theory is to ensure that the private operator, Aqua Vitens Rand Limited (AVRL) respects the terms of divestiture, while upholding the principles of accountability. However, the findings of the study suggest that the failure of government (agent) to uphold core accountability mechanisms such as transparency, accessibility to information, sense of ownership, responsiveness, and conformity to established monitoring and evaluation measures, contributed to the inability to achieve key performance targets, leading to the unsuccessful policy outcome of the privatization contract. This paper, therefore, argues that the failure to adopt accountability mechanisms in the divestiture of SOEs will inevitably compromise administrative policy outcomes.
Full Text:
PDFReferences
Adamolekun, L. (2010). The governors and the governed: Towards improved accountability for achieving good development performance. Africa Review, 2(2), 105-138. https://doi.org/10.1080/09744053.2010.10597295
Afegbua, S. I., & Ejalonibu, G. L. (2015). Emerging Issues in Public Sector Reforms in Africa: An Assessment of Ghana and Nigeria. Africa’s Public Service Delivery & Performance Review, 95-126. https://doi.org/10.4102/apsdpr.v3i3.91
Aguilar-Benitez, I., & Jean-Daniel, S. (2010). Public accountability and performance of two border water utilities. Water Policy, 12(2), 203-219. https://doi.org/10.2166/wp.2009.032
Ainuson, K. G. (2010). Urban Water Politics and Water Security in Disadvantaged Urban Communities in Ghana. African Studies Quarterly, 11(4), 59-82.
Akpanuko, E. E., & Asogwa, I. E. (2013). Accountability: A Synthesis. International Journal of Finance and Accounting, 2(3), 164-173.
Al-Shbail, T., & Aman, A. (2018). E-government and accountability. Transforming Government: People, Process and Policy, 12(2), 155-190. https://doi.org/10.1108/TG-09-2017-0057
Appiah-Kubi, K. (2001). State-Owned Enterprises and Privatization in Ghana. The Journal of Modern African Studies, 39(2), 197-229. https://doi.org/10.1017/S0022278X01003597
Atkins, L., & Wallace, S. (2012). Research Methods in Education: Qualitative research in education. London: SAGE Publications Ltd. https://doi.org/10.4135/9781473957602
Bakre, O. M., & Lauwo, S. (2016). Privatisation and accountability in a “crony capitalist” Nigerian state. Critical Perspectives on Accounting, 39, 45-58. https://doi.org/10.1016/j.cpa.2016.01.003
Barendrecht, A., & Nisse, M. (2011). Management Contract 2006–2011 for Urban Water Supply in Ghana. A Partnership – in and for – Development. Vitens-Evides International, The Netherlands.
Barendrecht, M. (2011). Rule of law, measuring and accountability: Problems to be solved bottom up. Hague Journal on the Rule of Law, 3(2), 281-304. https://doi.org/10.1017/S1876404511200071
Bayliss, K. (2003). Utility Privatisation in Sub-Saharan Africa: A Case Study of Water. The Journal of Modern African Studies, 41(4), 507-531. https://doi.org/10.1017/S0022278X03004415
Boafo-Arthur, K. (1999). Ghana: Structural adjustment, democratization, and the politics of continuity. African Studies Review, 42(2), 41-72. https://doi.org/10.2307/525364
Bohman, A. (2010). Framing the Water and Sanitation Challenge: A History of Urban Water Supply and Sanitation in Ghana.1909-2005. Sweden-Umeὰ.
Bovens, M. (2010). Two concepts of accountability: Accountability as a virtue and as a mechanism. West European Politics, 33(5), 946. https://doi.org/10.1080/01402382.2010.486119
Brandsma, G. J., & Schillemans, T. (2013). The Accountability Cube: Measuring Accountability. Journal of Public Administration Research and Theory, 23(4), 953–975. https://doi.org/10.1093/jopart/mus034
Bryman, A., & Bell, E. (2011). Business research methods. Cambridge ; New York, NY : Oxford University Press.
Bryson, J. M., Crosby, B. C., & Bloomberg, L. (2014). Public Value Governance: Moving Beyond Traditional Public Administration and the New Public Management. Public Administration Review, 74(4), 445-456. https://doi.org/10.1111/puar.12238
Centre for Law and Democracy (CLD) (2018). Ghana: Analysis of the Right to Information Bill.https://www.law-democracy.org/live/wp content/uploads/2018/06/Ghana.FOI_.Jun18.pdf
Cook, B. J. (2018). Old and new: Privatization and the accountability challenge. Administration & Society, 50(3), 319-320. https://doi.org/10.1177/0095399717754097
Creswell, J. W. (2003). Research Design: Qualitative, Quantitative and Mixed Methods Approaches (2nd ed.). Thousand Oaks: Sage.
Dagdeviren, H., & Robertson, S. A. (2013). A critical assessment of the incomplete contracts theory for private participation in public services: the case of the water sector in Ghana. Cambridge Journal of Economics. https://doi.org/10.1093/cje/bet007
Danso, A. (1992). Privatization of State-Owned Enterprises in Africa: The Case of Ghana. South Eastern Political Review, 335-351. https://doi.org/10.1111/j.1747-1346.1992.tb00314.x
Dubnick, M. J., & Yang, K. (2011). The Pursuit of Accountability: Promise, Problems, and Prospects, in D. C. Menzel and H. White (eds.), The state of public administration: issues, challenges, and opportunities (pp. 171-186). Armonk, NY: M.E. Sharpe, forthcoming.
Estrin, S., & Pelletier, A. (2018). Privatization in Developing Countries: What Are the Lessons of Recent Experience? The World Bank Research Observer, 33(1), 65-102. https://doi.org/10.1093/wbro/lkx007
Fichtner, H. W. (2010). 4th Year Management Contract - Technical Audit Report. Accra: GWCL/World Bank.
Fuest, V., & Haffner, S. A. (2007). ‘PPP – policies, practices and problems in Ghana’s urban water supply’, Water Policy, 9, 169-192. https://doi.org/10.2166/wp.2007.060
Gailmard, S. (2012). Accountability and principal-agent models. Berkeley, CA: Berkeley University.
George, A. L., & Bennett, A. (2005). Case studies and theory development in the social sciences (4th ed.). Cambridge, MA: MIT Press.
Gerring, J. (2007). Case study research: Principles and practices. Cambridge University Press. https://doi.org/10.1017/CBO9780511803123
Gerring, J., & Cojocaru, L. (2016). Selecting Cases for Intensive Analysis: A Diversity of Goals and Methods. Sociological Methods & Research, 45(3), 392-423. https://doi.org/10.1177/0049124116631692
GhanaWeb. (2018). ECG takeover: PUWU questions MiDA's selection of Meralco. [Online] Available: https://www.ghanaweb.com/GhanaHomePage/NewsArchive/ECG-takeover-PUWU-questions-MiDA-s-selection-of-Meralco-644904 (April 20, 2018).
GhanaWeb. (2019). New company takes over ECG on February 1.[Online] Available: https://www.ghanaweb.com/GhanaHomePage/business/New-company-takes-over-ECG-on-February-1-714317 (January 11, 2019).
GhanaWeb. (2019). PDS takes over ECG today after initial postponement. [Online] Available: https://www.ghanaweb.com/GhanaHomePage/business/PDS-takes-over-ECG-today-after-initial-postponement-726643 (February 27, 2019).
GhanaWeb. (2019). Privatisation of ECG operations starts. [Online] Available: https://www.ghanaweb.com/GhanaHomePage/business/Privatisation-of-ECG-operations-starts-720262 (February 2, 2019).
Greiling, D., & Spraul, K. (2010). Accountability and the Challenges of Information Disclosure. Public Administration Quarterly, 34(3), 338-377.
Grizzle, C., & Sloan, M. F. (2016). Assessing Changing Accountability Structures Created by Emerging Equity Markets in the Nonprofit Sector. Public Administration Quarterly, 40(2), 387-408.
GWCL/AVARL. (2005). Management Contract for Ghana Urban Water. Accra: GWCL and AVRL.
Hall, A. T., & Ferris, G. R. (2011). Accountability and extra-role behavior. Employee Responsibilities and Rights Journal, 23(2), 131-144. https://doi.org/10.1007/s10672-010-9148-9
Handley, A. (2007). Business, Government, and the Privatisation of the Ashanti Goldfields Company in Ghana. Canadian Journal of African Studies, 41(1). Canadian Business & Current Affairs Database. https://doi.org/10.1080/00083968.2007.10751350
Heyer, G. (2011). New public management. Policing, 34(3), 419-433. https://doi.org/10.1108/13639511111157492
Hirvi, M. (2012). Water Privatization and Social Citizenship: The Case of Urban Water Sector in Ghana, Journal of Civil Society, 8(4), 351-368. https://doi.org/10.1080/17448689.2012.744231
Jarvis, M. D. (2014). The black box of bureaucracy: Interrogating accountability in the public service. Australian Journal of Public Administration, 73(4), 450-66. https://doi.org/10.1111/1467-8500.12109
Kalimullah, N. A., Alam, K. M. A., & Nour, M. M. A. (2012). New Public Management: Emergence and Principles. BUP Journal, 1(1), 1-22.
Kayizzi-Mugerwa, S. (2002). Privatization in sub-Saharan Africa on Factors Affecting Implementation. Helsinki: UNU World Institute for Development Economics Research (UNU/WIDER) Discussion Paper No. 2002/12.
Krahman, E. (2016). NATO contracting in Afghanistan: the problem of principal–agent networks, International Affairs, 92(6), 1401-1426. https://doi.org/10.1111/1468-2346.12753
Levy, R. (2010). New public management: End of an era? Public Policy and Administration, 25(2), 234-240. https://doi.org/10.1177/0952076709357152
Lindberg, S. I. (2013). Mapping accountability: core concept and subtypes. International Review of Administrative Sciences, 79(2), 202–226. https://doi.org/10.1177/0020852313477761
MCC (2014). Millennium Challenge Compact Between the United States of America Acting Through the Millennium Challenge Corporation and the Republic of Ghana. https://www.mida.gov.gh/pages/view/43/MCA_CompactII-0.pdf
Mvulirwenande, S., Wehn, U., & Alaerts, G. (2019). Policy factors explaining the failure of delegated management in water supply: evidence from Ghana, Water International, 44(1), 14-30. https://doi.org/10.1080/02508060.2018.1539697
Obadan, M. I. (2009). Economic and Social Impact of Privatisation of State-owned Enterprises in Africa. Oxford: African Books Collective. Retrieved from: Project MUSE database.
Olsen, J. P. (2015). Democratic order, autonomy, and accountability. Governance, 28(4), 425-440. https://doi.org/10.1111/gove.12158
Owusu, F. (2006). Differences in the Performance of Public Organizations in Ghana: Implications for Public Sector Reform Policy. Development Policy Review, 24(6), 693- 705. https://doi.org/10.1111/j.1467-7679.2006.00354.x
Rached, D. H. (2016). The concept(s) of accountability: Form in search of substance. Leiden Journal of International Law, 29(2), 317-342. https://doi.org/10.1017/S0922156516000042
Ray, S. (2012). Reinforcing accountability in public services: An ICT enabled framework. Transforming Government: People, Process and Policy, 6(2), 135-148. https://doi.org/10.1108/17506161211246890
Robinson, M. (2015). From old public administration to the new public service: implications for public sector reform in developing countries. Singapore: United Nations Development Programme, Global Centre for Public Service Excellence.
Schillemans, T. (2010). Redundant Accountability: The Joint Impact of Horizontal and Vertical Accountability on Autonomous Agencies. Public Administration Quarterly, 34(3), 300-337.
Shaban, A., & Rahman, A. (2019). Ghana president assents to Right to Information bill. [Online] Available: https://www.africanews.com/2019/05/22/ghana-president-assents-to-right-to-information-bill// (May 22, 2019).
Shang-Quartey, L. (2013). From Private Sector Participation to Full Public Ownership: Why the Urban Water Management Contract in Ghana was discontinued. Retrieved from: LShang_moodledata_temp_turnitintool_212682749._94_1384335988_2167%20(2).pdf
Sharma, V., & Yadav, A. K. (2011). A Study of Disinvestment and Privatization Polices of PSU In India. Journal of Commerce & Trade, 6(1), 112-116.
Sulemana, S. (2017). A Multiple Streams Approach to Understanding Social Policy in Ghana: The Case of Livelihood Empowerment Against Poverty. Journal of Public Administration and Governance, 7(4), 198-210. https://doi.org/10.5296/jpag.v7i4.11903
Tweneboah, F. D. (1999). Privatisation of a Large State Corporation - Some Issues Arising. Paper Presented at a Workshop on Privatisation and Infrastructure Development, Accra: GIMPA.
USAID. (2014). Ghanaians Discuss Privatization Options with India and Uganda. https://www.usea.org/sites/default/files/Ghana%20article.pdf
Whitfield, L. (2006) The politics of urban water reform in Ghana. Review of African Political Economy, 33, 109, 425-448. https://doi.org/10.1080/03056240601000812
Yeboah, I. (2006). Subaltern strategies and development practice: urban water privatization in Ghana. The Geographical Journal, 172(1), 50-65. https://doi.org/10.1111/j.1475-4959.2006.00184.x
Zaato, J. J. (2014). Look before you leap: lessons from urban water sector reforms in Ghana. Journal of Asian African Studies 0021909614541077. https://doi.org/10.1177/0021909614541077
Zullo, R. (2018). Explaining Privatization Failure: The Vice of Sweet Carrots and Hard Sticks. Review of Radical Political Economics, 51(1), 111–128. https://doi.org/10.1177/0486613417718527
DOI: https://doi.org/10.5296/jpag.v9i4.15600
Copyright (c) 2019 Eugene Danso
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Journal of Public Administration and Governance ISSN 2161-7104
Email: jpag@macrothink.org
Copyright © Macrothink Institute
To make sure that you can receive messages from us, please add the 'macrothink.org' domain to your e-mail 'safe list'. If you do not receive e-mail in your 'inbox', check your 'bulk mail' or 'junk mail' folders.
------------------------------------------------------------------------------------------------------------------------------------------------------
