Performance contracts and State enterprises : the Ghanaian perspective

Abstract

Evidence from earlier studies on the use of Performance Contract (PC) has been mixed since its introduction as a tool to among other thing improve the operations of state-owned enterprises (SOEs) and ultimately their performance. This study builds on the latest study on the subject by Larbi (2001) who used an SOE in Ghana. What makes this study different is that it goes beyond the case of only one SOE and PC.

The current paper adopts qualitative research approach where data were gathered through interviews, examination of PCs and other documentations.

The study confirms some of the finding of the earlier studies on the operations of PCs in Ghana, but adds one more performance indicator to the three (3) identified by Larbi (2001): the dynamic effects. Furthermore, PCs in Ghana tend to assign high weight to economic goals and in some cases no weight to productivity. With regard to improved results there are considerable variations which are attributable to the many and various performance indicators