Poland stands out unfavorably among EU and OECD countries when it comes to state ownership. The state controls not only large, key enterprises vital to the economy but also players in much less significant sectors, such as confectionery or plumbing fixtures. According to representatives of the Civil Development Forum (FOR), this situation “poisons” both the economy and politics. In FOR’s surveys, Poles expressed generally pro-privatization views, although when it comes to questions about privatizing large companies, their stance becomes much less decisive.
“Poland is particularly negative compared to EU or OECD countries in terms of state ownership. The share of state ownership is very high. For example, about half of banking sector assets are held by banks controlled directly or indirectly by the state. This is by far the highest level among EU and OECD countries. State ownership is also very significant in major enterprises, such as Orlen, Polska Grupa Energetyczna, or the largest insurer in Poland. In this respect, we also stand out negatively compared to other countries. Moreover, the state in Poland controls companies in sectors one would think are insignificant—like candy factories, plumbing fixture manufacturers, or plywood producers,” says Marcin Zieliński, president and chief economist at FOR, in an interview with Newseria.
According to last year’s analysis by the Civil Development Forum (“State Ownership – The New Government Follows in the Footsteps of PiS”), the International Monetary Fund assessed that in 2016, state-controlled enterprises in Poland accounted for about 17% of value added and employed around 13% of the workforce. This is the highest among post-socialist EU countries. Only Bosnia and Herzegovina, Ukraine, Serbia, Russia, and Belarus have a higher share of public sector employment, while in terms of value added, only Russia and Belarus exceed Poland.
“If we compare Poland to other Central and Eastern European countries that joined the EU, like the Czech Republic, Slovakia, Slovenia, or Croatia, we can clearly see there is much less state ownership in those countries. There is much more in countries such as Russia or Belarus. Poland is closer to Russia or Belarus than to the Czech Republic or Slovakia,” emphasizes Zieliński. “These are authoritarian systems, which shows there is a link between state ownership and low levels of democracy. This also means that if we care about the state of democracy in Poland, we should strive to reduce state ownership.”
FOR, citing an index prepared in 2022 by Maciej Bałtowski and Grzegorz Kwiatkowski (in “State-Owned Enterprises in the Global Economy”), notes that the share of state-controlled entities among the 100 largest firms in the country, measured by turnover and assets, is almost 50% in Poland.
“State ownership poisons both the economy and politics. It has a negative impact on the economy because resources are used inefficiently, which means slower economic growth. It also causes certain conflicts, because many state-controlled companies operate in monopolistic sectors and are overseen by state regulators. This can lead to the regulator favoring the state-owned company in its decisions. State ownership also has a profoundly negative impact on politics, as state-owned enterprises become political spoils,” explains Zieliński. “State-owned companies can negatively affect the state of democracy. Before the 2023 elections, we saw cases like state-controlled company foundations being used in referendum campaigns, or at gas stations where Orlen artificially suppressed fuel prices.”
As the expert points out, state ownership clearly distorts competitiveness. Even if a state-owned company is underperforming, it can count on various subsidies granted by politicians. One example is the unprofitable state-owned mining sector, which is supported by billions from the national budget.
According to a new survey conducted by Opinia24 for FOR (“We Ask Poles About Privatization”), most people generally support reducing government influence on the economy, though much depends on the phrasing of the questions. Poles are more likely to support limiting politicians’ roles in the economy if the word “privatization” is not used directly. Sixty-six percent agree that politicians should only create the legal framework for the economy, not manage companies; 65% believe politicians should not decide who manages enterprises or what decisions are made by firms. Almost 60% say the economy functions better when as many companies as possible are in private hands and as few as possible are state-owned.
“In terms of general attitudes toward the economic model, Poles are generally more pro-privatization than anti-privatization. The most pro-privatization attitudes are observed among the wealthiest, best-educated, large city residents—usually older people rather than younger,” says Dr. Andrzej Machowski, an external expert at FOR and author of the study “We Ask Poles About Privatization.”
At the same time, less than half of Poles agree that it would be better if companies such as Orlen or KGHM Polska Miedź were owned by private investors.
“When we ask specifically whether companies like Orlen or KGHM should be privatized, the percentage of pro-privatization responses drops significantly. Interestingly, the demographic profile also changes completely. The least pro-privatization are the wealthier, better-educated, large city residents, while the most pro-privatization are the young, rural, less educated, and less affluent,” Machowski points out.
In general questions—about the role of politicians in the economy—the most pro-privatization views are held by supporters of the Civic Coalition (71 points), Confederation (69), Third Way (68), and the Left (67). There was significantly less support among voters of PiS (57) and the Razem Party (53). When asked specifically about the privatization of certain companies, relatively the strongest pro-privatization attitudes were expressed by Third Way voters (57 points). Among voters of other parties, the stance was much more cautious: PiS voters 40 points, Razem Party 42, and KO 44.
“The Civic Coalition’s narrative on privatization is very diverse. On one hand, the party emphasizes the importance of the market reforms Poland undertook after 1989, so its voters have a natural tendency to accept broad theses. But considering that Civic Platform has not spoken about or proposed further privatization for years, its loyal voters are probably very skeptical about whether companies should actually be privatized,” comments Dr. Andrzej Machowski. “A very interesting conclusion from this research is that today we have two rather antagonistic left-wing parties—Razem and the New Left—which is not accidental. The voters of these two parties have very different views on privatization. New Left voters tend to favor a liberal economy and free market, while Razem voters—alongside Law and Justice (PiS) voters—are the most statist.”
