engleski

From accountable government to public asset management reform and welfare

Good management practice in both private and public sector is well described in the existing literature. There is no doubt that many of the recent public sector reform mainstreams have firstly been developed and implemented in the private sector context (accrual accounting, corporate governance) and then translated into the public sector (financial reporting and budgeting, good governance). The concept of transparency is inevitable for enhancing a professional and accountable approach in public expenditures’ planning and in measuring public expenditures’ effectiveness, particularly when performing and controlling public asset management activities. The motivation for this paper emerges from the experiences of some developed countries which have passed through numerous changes that helped creating a supportive environment for improved public sector management and public asset management as its compounding part. These changes refer mostly to introducing good governance and business-style financial reporting practices in governments in order to ensure a sound information base for measuring the quality of outcomes provided to the citizens based on the amount of collected and reimbursed money from them. This paper examines the impact of sovereign investment funds’ presence both domestically and in the global financial markets. Due to the size of public assets therein, they are regarded as one of possible vehicles for conducting public asset management activities. The research finds that the establishment of such funds and entities that manage them varies in line with the legal and institutional framework of a particular country. Notwithstanding the name investment companies and public assets’ funds are given, it is a fact that the latter belong to the group of extra-budgetary funds composed of certain type(s) of national wealth. This implies that public authorities in developed countries kick-start investment practice the same way the private investors do. It also means that the time has come for developing countries to consider earning profits from managing and (re)investing their public assets as well. Deriving from the concept that the state organisation can be equalised with business organisation in general and that public assets are “ manageable” , the paper deals with public property preservation, usage and value enhancement in transition countries. For this purpose the experiences of developed countries are put into general transitional countries’ setting. It is noticed that the governments in transition countries often do not possess even basic knowledge of what types of assets the public asset portfolio is comprised from, who is the actual and who is the institutional owner of public assets, as well as the knowledge of who has the right (privilege) to control them. After the privatisation processes have left an indelible mark on the economies and societies in transition countries, these countries will have to face with the public sector reform in general and particularly with the public asset management reform suitable for modern, democratic states. The crucial questions that arise therewith are what are the preconditions for efficient public asset management and whether employing public assets under the supervision of professional management can ensure better public services and welfare to the citizens.

good governance; public asset (financial) management; sovereign wealth funds; transition countries; welfare

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