The importance of the regulation of public enterprises

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Abstract

The rule of law is a necessary issue for the economic development of a country, while its absence hinders economic development (Krever, 2011). The main aim of this study is to analyze the way of governing and supervising public enterprises in the case of Kosovo. This study shed light on the importance they have in the development and balance of the legal system of a state and a functioning democracy which together enable the preservation, increase of responsibility, and reduction of undue political influence. Good corporate governance following the provisions of domestic law and the lack of political influence of the Government in these bodies is a good signal and indicator for foreign investors and lenders that investing and lending to such companies is safe as the lack of governance enables market disruption while on the other hand deprives citizens of quality public services. Based on ownership, publicly owned enterprises (POEs) are organized into central POEs owned by the Government of Kosovo and local POEs owned by one or more municipalities. The Government and the municipalities exercise their rights in these enterprises through the election of the board of directors (Ministry of Economic Development, 2018). Lack of good governance discourages foreign investors and thus slows down the further evolution of ownership and stagnation in the development of the country’s economy.

Keywords: Governance, Oversight, Public Enterprises, Boards of Public Enterprises, Ownership of Public Enterprises

Authors’ individual contribution: Conceptualization — X.I., B.Z., and A.B.; Methodology — X.I., B.Z., and A.B.; Data Curation — X.I., B.Z., and A.B.; Writing — Original Draft — X.I., B.Z., and A.B.; Writing — Review & Editing — X.I., B.Z., and A.B.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: K10, K20, K22

Received: 21.03.2022
Accepted: 24.04.2023
Published online: 27.04.2023

How to cite this paper: Ibraimi, X., Ziberi, B., & Brestovci, A. (2023). The importance of the regulation of public enterprises. Corporate Law & Governance Review, 5(1), 122–128. https://doi.org/10.22495/clgrv5i1p11