Corporate governance in state-owned enterprises: the role of informal institutions

The chapter considers the role of informal institutions in shaping SOEs’ corporate governance. In their analysis the authors provide examples from a post-transitional economy of Poland, once a member of the Soviet Bloc and now a member of the European Union. In this particular country setting, differences between formal institutions, which can be changed rapidly and were once informal, tend to be path-dependent and are probably the easiest to see. In the chapter the authors propose an analytical framework based on Scott’s multilevel framework of institutions (Scott, 2001) and Grzymala–Busse’s (2010) division of the relationships between formal and informal SOEs institutions. The framework is based on two assumptions. First, the informal institutional mechanisms influence directly or indirectly their formal counterparts. This influence may be undermining, replacing, supporting, and competitive. Second, both kinds of mechanisms are affected by normative and cognitive institutions. The main conclusion of the chapter is that SOEs’ corporate governance systems are formed and determined not only by formal but also by informal institutions and by the relations between them.