All the alleged key causes of SOE [State-Owned Enterprise] inefficiency—the principal–agent problem, the free-rider problem and the soft budget constraint—are, while real, not unique to state-owned enterprises. Large private-sector firms with dispersed ownership also suffer from the principal-agent problem and the free-rider problem. So, in these two areas, forms of ownership do matter, but the critical divide is not between state and private ownership—it is between concentrated and dispersed ownerships.

What It Means

This is a placeholder explanation generated by the low-overhead model. It interprets "All the alleged key causes of SOE [State-Owned Enterprise] inefficiency—the principal–agent problem, the free-rider problem and the soft budget constraint—are, while real, not unique to state-owned enterprises. Large private-sector firms with dispersed ownership also suffer from the principal-agent problem and the free-rider problem. So, in these two areas, forms of ownership do matter, but the critical divide is not between state and private ownership—it is between concentrated and dispersed ownerships." in the context of "Ch. 5: 'Man exploits man; Private enterprise good, public enterprise bad?', The pitfalls of privatization, p. 116" to mean that wisdom is timeless.