This week, the board of BP agreed to sell its stake in TNK-BP in favour of an alliance with the state-backed Rosneft. When working in uncertain emerging markets, such as Russia, is it better to be partners with the private sector or the state?
The academic: Bhaskar Chakravorti
First, ask four questions: is the state dominant in the economy? Is the industry mainly reliant on natural resources and scale (rather than on a detailed understanding of market needs or on adaptability)? Are capital markets and essential related factors (such as infrastructure, regulation, licence regimes) unreliable? Can you unlock value by bringing efficiencies to inefficient-but-protected industries?
Read the full piece
Find here the transcript of a conversation that Prof. Chakravorti had with Dean Peter Uvin on what development organizations can learn from private corporations.