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The aim of this paper is to shed new light on key challenges in governance arrangements for state owned enterprises in infrastructure sectors. The paper provides guidelines on how to classify the fuzzy and sometimes conflicting development goals of infrastructure and the governance arrangements needed to reach such goals. Three policy recommendations emerge. First, some of the structures implied by internationally adopted principles of corporate governance for state owned enterprises favoring a centralized ownership function versus a decentralized or dual structure have not yet been sufficiently "tested" in practice and may not suit all developing countries. Second, general corporate governance guidelines (and policy recommendations) need to be carefully adapted to infrastructure sectors, particularly in the natural monopoly segments. Because the market structure and regulatory arrangements in which state owned enterprises operate matters, governments may want to distinguish the state owned enterprises operating in potentially competitive sectors from the ones under a natural monopoly structure. Competition provides not only formidable benefits, but also unique opportunities for benchmarking, increasing transparency and accountability. Third, governments may want to avoid partial fixes, by tackling both the internal and external governance factors. Focusing only on one of the governance dimensions is unlikely to improve SOE performance in a sustainable way.

Accountability --- Banks and Banking Reform --- Corporate governance --- Debt Markets --- Disclosure --- Finance and Financial Sector Development --- Financial institutions --- Governance --- National Governance --- Private ownership --- Private sector participation --- Public Private Partnerships --- Public sector --- Public Sector Economics and Finance --- Public Sector Expenditure Analysis and Management --- State ownership --- Transparency

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The aim of this paper is to shed new light on key challenges in governance arrangements for state owned enterprises in infrastructure sectors. The paper provides guidelines on how to classify the fuzzy and sometimes conflicting development goals of infrastructure and the governance arrangements needed to reach such goals. Three policy recommendations emerge. First, some of the structures implied by internationally adopted principles of corporate governance for state owned enterprises favoring a centralized ownership function versus a decentralized or dual structure have not yet been sufficiently "tested" in practice and may not suit all developing countries. Second, general corporate governance guidelines (and policy recommendations) need to be carefully adapted to infrastructure sectors, particularly in the natural monopoly segments. Because the market structure and regulatory arrangements in which state owned enterprises operate matters, governments may want to distinguish the state owned enterprises operating in potentially competitive sectors from the ones under a natural monopoly structure. Competition provides not only formidable benefits, but also unique opportunities for benchmarking, increasing transparency and accountability. Third, governments may want to avoid partial fixes, by tackling both the internal and external governance factors. Focusing only on one of the governance dimensions is unlikely to improve SOE performance in a sustainable way.

Accountability --- Banks and Banking Reform --- Corporate governance --- Debt Markets --- Disclosure --- Finance and Financial Sector Development --- Financial institutions --- Governance --- National Governance --- Private ownership --- Private sector participation --- Public Private Partnerships --- Public sector --- Public Sector Economics and Finance --- Public Sector Expenditure Analysis and Management --- State ownership --- Transparency

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This paper presents new global evidence on the key determinants of public-private partnership investment in electricity transmission and distribution, based on a panel data analysis of 105 developing countries over a period of 16 years from 1993 to 2008. It aims to identify the key factors affecting the private investor's decision to enter electricity transmission and distribution, through a probit analysis and the amount of investment sunk in this market segment, based on Heckman's sample selection analysis. One of the key results of the analysis is that sector regulatory governance affects only the entry of private investors in electricity transmission and distribution. It is not significantly linked to higher investment in transmission and distribution. The result implies that the power of the incentive has not been so strong as to affect the volume of investment. Similarly, economy-wide governance factors, including control for corruption and degree of political competition, are factored in by private investors only in the initial stage of the game when the decision to enter into the transmission and distribution market is taken. This reinforces the expectation that private investors seem to be adequately protected against risks, so that once they have entered the market, they can accommodate the governance environment. Finally, the introduction of renewables in the power system enhanced overall public-private partnership investment in transmission and distribution. Renewable-based energy also requires technical and regulatory certainty about the availability of renewable-ready transmission resources.

Debt Markets --- Economic Theory & Research --- Electricity transmission --- Emerging Markets --- Energy --- Energy Production and Transportation --- Investment and Investment Climate --- Private investors --- Probit analysis --- Public-private partnership investment --- Regulatory governance

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This paper aims to shed some new light on the conditions needed to ensure the effectiveness of Boards of Directors of state owned enterprises with a focus on infrastructure sectors. In the case of developing countries, empirical studies have found evidence of positive links between the composition of the Board of Directors and financial performance. Yet the lack of solid theoretical foundations, and in some cases poor data availability, makes the conclusions of most studies weak. Several policy recommendations emerge from the review of the economic literature and evidence from case studies. First, the introduction of a sufficient number of independent directors emerges as an important corporate governance milestone. Empowering them to exercise effective monitoring of management, however, may prove to be a formidable challenge for of state owned enterprises. More attention to board procedures, particularly related to the Board selection and evaluation process, is essential, to produce the necessary insulation of Boards from government interference. Ensuring sufficient continuity of services to directors is particularly crucial to improve corporate governance. In addition, other factors that may reduce directors' ability to monitor corporate activities, such as the age profile and the number of Boards on which they sit, need to be handled more carefully.

Board member --- Boards of Directors --- Corporate governance --- Corporate Law --- Debt Markets --- Emerging Markets --- Finance and Financial Sector Development --- Financial performance --- Firm performance --- Governance --- Governance arrangements --- Independent directors --- Law and Development --- Little attention --- Microfinance --- National Governance --- Private enterprises --- Private Partnerships --- Private Sector Development

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This paper presents new global evidence on the key determinants of public-private partnership investment in electricity generated by fossil fuels and renewable energy based on a panel data analysis for 105 developing countries over a period of 16 years from 1993 to 2008. It aims to identify the key factors affecting private investors' decision to enter electricity generation, through probit analysis, and the amount of investment sunk in this market segment, based on Heckman's sample selection analysis. The paper shows some evidence of switching from investment in fossil fuels to investment in hydro and renewables and within fossil fuels from oil to natural gas. An interesting result of the econometric analysis is that the likelihood of switching toward renewable investment is driven by long-run environmental factors, such as the increases in the price of oil and the introduction of the Kyoto protocol. Another interesting result is that sector governance support schemes, provided by feed-in tariffs, affect only the entry in renewable based electricity generation and have no impact in reducing the amount of investment in fossil fuel based generation. Economy-wide governance factors, including control for corruption and degree of political competition, are factored in by private investors only in the initial stage of the game when the decision to enter into the generation market is taken and not the amount of investment. This confirms that the first generations of independent power producers have been developed on the basis of long-term power purchase agreements guaranteeing a fixed rate of return, through take-or-pay clauses and/or government guarantees.

Econometric analysis --- Electricity generation --- Emerging Markets --- Energy --- Energy and Environment --- Energy Demand --- Energy Production and Transportation --- Environment and Energy Efficiency --- Fossil fuels --- Kyoto protocol --- Public-private partnership investment