| Since the onset of state majority ownership in 1974, the Ghana Bauxite Company (GBC) began a ten-year decline in commercial performance. The thesis' objective is to examine the linkage between state ownership and poor performance. It is hypothesized that the firm's performance will be affected by a conflict in goals between the government and the company. A second hypothesis links the degree of autonomy held by management to the efficiency of the firm's operations.;The performance of the GBC is evaluated in terms of the company's goals and the government's goals, as derived from the Joint Venture Agreement (JVA). This reveals wide unanimity between the two parties over a number of political, economic, and social goals. Many of these were achieved, but the commercial goals of expanding exports and foreign exchange earnings were not. Thus, the hypothesis that company performance could be explained by conflicting goals is refuted. The management's complete autonomy refutes the second hypothesis.;The thesis then seeks to explain the shortfall in the GBC's economic commercial performance. Two key factors affected performance. One, Ghana's economic decline meant that the overvalued exchange rate, inflation, and import licensing system impacted adversely on the company. Two, the GBC was completely reliant on the railway for bauxite carriage. Thus, the railway's growing deterioration constrained the GBC's exports. The railway's decline, the GBC's near-collapse, and Ghana's adverse economic environment are explained by governments' transport, economic, and mineral policies from 1974-83.;The GBC's performance improved sharply under policy changes made in 1984-86, under the Economic Recovery Programme. The ERP introduced liberalized economic policies--particularly, the devaluation of the currency-- and rehabilitation of the railway. The GBC's turnaround directly supports the thesis' arguments that factors external to state ownership militated against the firm's successful commercial performance.;This thesis demonstrates that managerial autonomy, not ownership, is key to predicting SOE performance. However, managerial autonomy, while important, is not a sufficient guarantor of performance-- both the macroeconomic environment and institutional relationships are critical to SOE behavior. Finally, current privatization efforts are likely to be successful only in the context of economic liberalization. |
