No one size fits all and room to improve

Intense weekend with the elections and a heat in which one would prefer to lock oneself in the cinema for three hours with good air conditioning to see Christopher Nolan's Oppenheimer. It is curious to reflect on a Sunday like today about the public company and to think of that controversial scientist as the director of one of the most knowledge-intensive public projects and, at the same time, the most destructive for humanity.. If you are wondering why public companies should or should not exist, think about the end (social and not just financial efficiency) and the means.. It always works as expected. Oppenheimer faced the monumental task of leading a group of scientists in the development of the first nuclear bomb.. Despite the critical and urgent nature of the project, it was not exempt from government red tape.. From equipment delays to tensions with military leaders. Paradoxically, the project was a private success and a public aberration.

I remember those 1980s when the scent of liberalization -not necessarily liberalism- permeated advanced economies around the world.. In 1985, while we were watching Marty McFly from Back to the Future in theaters, Spain began an intense privatization process. Since then, more than 120 companies have gone through this process, and from there emerged other important corporations that today are listed on the stock market.. Now the concept of a company, its taxation and the need for state ownership have once again been intensely debated.

To banish myths, let's start by pointing out that Spain is one of the EU countries with the least weight of public corporations. Even so, there are transport, mail or, especially, communication companies in the hands of the State whose income statement is not promising. Even though the majority of ownership is public, they must be managed by recognized professionals and follow efficiency criteria.. If we take the data and analyze the situation in Spain, we find that private companies have greater economic and financial profitability. The public ones appear as more solvent and with greater liquidity. Of course, to what extent this is achieved with the taxpayer's pocket or due to lack of competition should be clarified.

In any case, that wave of privatization that intensified in the 1990s under the so-called Washington Consensus has left lessons that should still be considered in Spain today.. The studies that were carried out more than twenty years ago in our country clearly showed that those large public corporations (including some banks) were not efficient and pale in comparison with other private ones.. However, something more than nuances has also been evidenced. The first, that there is no “one size” (one size does not fit all). Private companies are not always more efficient than public ones nor do they provide the same advantages to the citizen. On the other hand, a public company is not governed only by financial criteria. Also, public companies may lack the incentives of private companies due to a lack of competition or compensation structure.. Finally, in some cases, privatizations have led to improvements in efficiency and service.. In others, they have resulted in job loss, higher rates, or decreased quality of service.. It should be clearly distinguished that liberalizing is not always suppressing the public. In many cases, state-owned companies in any proportion can be there, but compete with other private providers.

Finally, the debate should not be carried too far.. The public company is not the same as the public service. In a country like Spain, services such as health have proven to work much better than private ones and, although they have a wide margin for improvement, they have avoided large-scale social problems observed in countries with almost total liberalization of these services.