The Politics of State-Owned Enterprise Reform in South Korea, Laos, and Vietnam

State-Owned Enterprise (SOE) reform in Laos has received very little attention in the academic literature, making Latdavanh Songvilay, Sthabandith Insisienmay, and Mark Turner’s study a trailblazing contribution. Like Vietnam, Laos began experimenting with privatization in the 1990s following disappointing economic results from central planning. As Laos was predominantly rural and poor, its SOE sector was small. However, powerful coalitions in the ruling party and government were still intent on reducing the state’s direct involvement in the economy despite opposition. An incremental process of SOE reform ensued in which small enterprises were privatized but larger ones were maintained for their strategic value. The Lao privatization study reveals a learning process by government, as is clearly demonstrated in the analysis of the reforms in the country’s electricity industry. However, the political dynamics of party and government are such that the state is still determined to maintain control of bigger SOEs while seeking their enhanced efficiency.