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Fifteen years ago, Thomas (2003) found that seven European energy utilities had a strong hold over European energy markets. By 2009, further concentration had occurred, with five large utilities becoming more dominant. However, by 2015, while the market share of these five companies remained intact, their strength was waning. Sales and profits were declining, and their credit ratings suffering. Contributing factors were poor corporate strategy, competition from new entrants, and a shift from large, complex technologies to smaller, decentralised options. The challenge for the Big Five is to embrace new business models and transform themselves into more nimble companies.

This article shows that the liberalization of the residential market for electricity in Chile may achieve important welfare gains. We built a model to assess two policy scenarios: partial and full liberalization. Simulations of the model provide equilibrium prices, the distribution toll, and welfare estimations on factual and counterfactual scenarios. Our policy recommendation is to partially liberalize the residential market for electricity. That is, to allow the entrance into this market but regulate both the incumbent's tariffs for residential customers and the distribution toll. Full liberalization, in which only the distribution toll is regulated, produces a lower increase in welfare.

This research examines the impact of EU liberalization policy tools on the rate of supplier switching in order to assess whether the objective of increased competition in the natural gas sector has been achieved. Three dynamic models are applied to a panel of 22 EU members between 1998 and 2013 to test the efficacy of eleven policy tools including privatization, in bringing competition to the market. Panel econometrics suggests that the liberalization tools implemented positively influence competition, although jointly rather than on a stand-alone basis. The implementation of pro-market regulations is associated with more competition in the sector. Among the various instruments, the virtual trading point, market-based balancing, market opening, and privatization have the greatest competition-enhancing potential.

Utility sector reform spread across the developing world in the 1980s and 1990s. In Egypt, as in many cases, the pace and nature of reform has been challenged by a state-owned national incumbent. However, in the Egyptian telecommunications sector, rapid growth in the cellular market has overtaken the archaic fixed-line system. Hence, the national monopoly provider, Telecom Egypt (TE), has been stripped of its market power as the market diversified. The implemented public sector reform and privatization placed efficiency pressures on TE resulting in improved outcomes for a range of stakeholders, consumers, workers, and the government, including reduced prices, increased access, and improved service quality. This experience offers lessons for policy makers and researchers about liberalization in the face of entrenched state interests. However, there are nuances in the findings relating to market type, that is, fixed-line versus cellular, residential versus non-residential, and national versus international. Despite attempted improvements, direct competition in its retail market has led to deterioration in TE's financial performance, although this has been partially offset by its monopoly supply of an essential input and a degree of protection provided by the regulator sympathetic to TE. The evidence from this case study supports the concept of a staggered introduction of competition. However, protecting inefficient market insiders, be it firms or workers, is always at the expense of potentially more efficient outsiders.

Two European and German policies – one transitioning to sustainable energy and the other enhancing competition – strained the German electricity sector's organizational structures, which had been designed for network stability and a secure supply. Digital technologies and the new business models were important factors in these changes. Based on qualitative interviews, we analyze how changes caused by liberalization and energy-transition policies are related to the internal organizational changes at publicly owned energy providers. While some companies legitimate new forms of work organization and employment, thereby disrupting old institutions, others block internal change with reference to the external institutional framework.

The liberalization of European markets in the provision of public services led some utility companies to expand their domain beyond their national borders. However, the effect of internationalization on the governance of public services at the local level in the host countries remains understudied. The opening of public service markets and their internationalization change the circumstances in which local politicians make their decisions. Through the analysis of the interplay between institutional contexts and the strategies local actors, this article maps the processes underpinning the integration of foreign and domestic companies in the delivery of local services in Italy since the late 1990s, with a particular focus on water and transport.

Trans-Anatolian Gas Pipeline (TANAP) as a part of the Southern Gas Corridor has significant implications for the transit security of the European Union and the domestic gas market of Turkey. Among those countries in Eurasia, only Turkey's process of liberalization is a success story, albeit an incomplete one. Surrounded by liberal markets to the West and monopolistic markets to the East, Turkey partially possesses a competitive gas market. TANAP, a unique project among the international pipelines in Eurasia, strengthens Turkey's peculiar position by de facto ending the monopoly of the incumbent BOTAŞ over gas transmission and thus contributes to the liberalization of the domestic market.

This paper examines the airline competition after liberalization through an empirical specification of a demand and pricing equation system. The system is estimated for the Scandinavian (Denmark, Norway, and Sweden) domestic airline market using a simultaneous-equations procedure. The purpose of this study is to gather the various reactions of the industry players and determine whether the competition model after liberalization, by studying routes covering 95% of these types of connections operated in this market. This study focuses on the mobility of same-day business travel passengers. This model, based on over 161 routes and over 56 fortnights from 2013 to 2015, allowed for the creation of a data panel intended to show whether or not the pattern of behavior in this market can be explained by the main oligopoly models. By estimating elasticities and analyzing behaviors in the airline market, this research can be helpful to transport authorities and airlines.

With the further liberalization of China's electricity market, electricity price becomes more important in the power supply-demand balance. We investigate the impacts of a hybrid time-varying tariff policy on residential electricity demand. In our estimation, we maximize the residential users' utility, taking average price responsiveness as their perceived price. Four indices related to power usage and expenses are designed to measure the response effects of time-varying tariff policy using a case study of Zhejiang province.

The rise in electronic communications and the recent liberalization of the postal market in the European Union have put national postal-service providers in Central and Eastern Europe (CEE) under pressure to restructure and optimize their operations. The paper employs non-parametric methods to measure the relative technical and cost efficiency of CEE postal operators in terms of quantity-based and quality-based output indicators. The results indicate that inefficiency varies between 20% and 30%. Regression analysis attributes efficiency gains to increased competition, institutional reforms, less burdensome customs procedures, and population density, while use of electronic mail was negatively related to postal-service efficiency.

Promoting competition among electricity producers is crucial for ensuring allocative efficiency and lower electricity prices. This paper empirically examines the wholesale electricity market of England and Wales in order to analyze to what extent regulatory reforms were successful at promoting competition among electricity producers. As a theoretical benchmark we consider a duopoly case, based on which a regression model is specified. The estimation of the regression model allows for documenting new results about the impact of regulatory reforms on the incentive and disincentive to exercise market power by electricity producers during the liberalization process.

In this paper, the bootstrapping Malmquist index is used to derive the productivity levels of Iranian steam power plants for the period of 2007–2012. The research shows that the average level of productivity has significantly decreased. It was also indicated that technological changes have had more effects on productivity than efficiency changes. To study the influence of various explanatory factors, the truncated regression method was used. The results show that factors such as liberalization of energy carrier prices, the ratio of the number of technicians to the total number of staff, and the age of power plants affect levels of productivity.

Turkey is one of the countries that recently initiated regulatory reform in public utilities. Although Turkey tried to introduce competition to many industries through a liberalization movement that started in the 1980s, utilities remained as monopolies until the early 2000s. In the beginning of the 2000s, reforms restructured the utilities through deregulation and competition policies and established independent regulatory agencies. Whereas the reforms have been successful in some aspects, they remain insufficient in others. This paper anecdotally investigates the effects of (de)regulation on selected public utility industries and analyzes the pros and cons of the reform process. Also, it presents a comparative analysis to better understand the current institutional and governmental issues in the reform process. The findings suggest that the recently changing stance of government towards the (de)regulatory process could thwart the success of reform.

This paper discusses the main aspects of the competitive and regulatory state of the postal sector. It presents the different models for postal competition and regulation in the EU and the US and their history, together with their implications on regulation, with a focus on universal services and network access. While postal monopolies used to be the main source of funding for universal service obligations, the need for alternative funding sources after full liberalization has increased the interest of regulators and the public in knowing the cost of these obligations. In parallel, new means of electronic communication and consumer needs call the traditional scope of universal services into question. This paper outlines the economic rationale of current policies and directions for future postal regulation to strengthen the postal services' commercial viability in a competitive age, while safeguarding their relevant characteristics for the economy.

One of the greatest challenges facing developing countries is gaining access to the capital necessary to achieve widespread electrification, and for this aid is essential. We examine the history of World Bank and other aid agencies' policies in fostering electrification around the world. A dataset comprised of 3745 multilateral and bilateral electrification aid projects is used to evaluate the determinants of such aid in the last three decades of the 20th century. Our major finding is that electrification aid by the 1990s had moved toward relatively poorer countries, except for those in Africa, and toward countries with better governance structures. Increased aid also flowed to countries that had restructured their electric power sector, likely reflecting the liberalization and privatization policies promoted by the World Bank and other aid donors from the mid-1980s onwards.

The implementation of the 2014 Water Act in England unbundled the customer-facing retail and customer service responsibilities from the infrastructure and maintenance wholesale operations for commercial consumers. This study explores the implications of such radical reform of the water supply network the ability to engage with consumers, maintain and develop environmental protections, and ensure security of water supplies. Individual interviews with 23 stakeholders from water supply companies, local authorities, environmental regulators, and consultants, and business representatives reveal a tension between the multiple water supply actors and the ability to deliver cost savings for commercial consumers.

This paper sets out the main reasons for introducing upstream competition in the water supply industry of England & Wales i.e. competition in the supply of raw and potable water to retailers and large users as well as some competition options. The paper discusses the possibilities for trade both in abstraction rights and in bulk water. The paper covers the issues that would need to be resolved for such competition to be effective, including rents, stranded assets and the concentration of water rights ownership. A lot of attention is given to transitional issues drawing on the lessons learned in UK natural gas industry liberalization and EU energy sector reforms over the last 15 years.

This study aims to contribute investigating the difficulties to reap the intended benefits from liberalization and regulatory reforms of network industries. This issue is tackled through the ‘theoretical lenses’ of new institutional economics, in particular by applying the Institutional Analysis and Development (IAD) framework. The study is a comparative analysis of liberalization and regulatory reforms of network industries within the same country context. In Italy, various reforms of network industries have been made and implemented during the 1990s and 2000s, especially in water, gas, electricity, telecommunications, railways, highways, local public transports, and urban solid waste. These reforms generally resulted in greater or lesser degrees of changes of regulatory institutions and industry structure, but in relatively modest competitive pressures on the whole. This analysis suggests that the difficulty to implement liberalization and regulatory reforms of network industries in Italy may be explained by various concurrent mechanisms, which have to do with the rent-seeking behavior of the actors of the industry’s community, the rise of barriers to entry against competitors, and the risk of collusive practices between regulators and regulated. This study suggests some tentative generalizations concerning the effectiveness of reforms intended to open up network industries to competitive pressures.

In this article we compare four Norwegian public utilities sectors: the electricity industry, the e-com industry, the railway and the postal service. All sectors have been subject to public policy reforms since the 1980s, though reform content and degree varies. In the electricity industry Norway is a liberalization forerunner – a virtual reform “hare”, to borrow from Olsen’s (1996) Aesop’s fable metaphor. In other network industries such as the railway Norway is a reform “tortoise”. We seek to answer the question: How and why has governance of the four industries been reformed? We explore four possible explanations for similarities and differences across sectors: technological change, market conditions, agency and European Union (EU) regulation. We cannot identify a national model for reforms across these sectors. We find single factors standing out in the explanation of the reforms in the various sectors. The puzzle is that it is different factors in different sectors.

This paper summarises the experience concerning electricity and natural gas in the UK and the European Union since the 1980s with a view to drawing lessons for potential liberalisation and the introduction of competition into the England and Wales water industry. The paper suggests that the main lesson from energy sector experience is the requirement is to develop upstream competition in the supply of bulk water both to retail supply companies and to large industrial consumers. The pattern of water supply and demand in England and Wales is that there are excess supplies in the North and West and supply shortages in the South and East. In consequence, provided that there is sufficient interconnection capacity within and between regions, there should be major potential gains from trade both in bulk water supplies as well as in trade of abstraction licences. Such trade can offer potentially sizeable environmental benefits in terms of water sustainability as well as in short and long-term efficiency benefits to consumers. The paper concludes with recommendations for some experiments with abstraction licence and bulk water trading, e.g. in the South East of England.

The economics of federalism is a broad discipline with more than five decades of experience. It may shed light on how regulatory jurisdiction is allocated in EU electricity and telecommunications markets. Specifically, this paper assesses the evolution of reform up to and including the third EU packages, which continue the liberalization and integration process in these markets. Liberalization has been accompanied by gradual harmonization of national markets to overcome resistance to competitive forces. Less steps than necessary have been undertaken to promote market integration; yet, positive and normative reasons remain for the participation of national or even regional/local powers. Vertical institutional cooperation will remain a necessary condition for a sound regulatory framework, but cooperation may sometimes be inhibited by distributive considerations.

In this article consequences of the introduction of competition for the field in the Italian natural gas distribution sector are analyzed. Natural gas distribution constitutes, due to its technical and economic features, a natural monopoly. For this reason, in the framework of the liberalization process, the Italian legislator has introduced, in addition to price regulation, competitive tenders in order to have different operators compete amongst each other for the service concession. After a brief overview of the economic theory referring to competition for the field and an overview of the Italian gas market, the critical aspects of the outlined regulatory framework will be highlighted. More particularly the main features of tenders will be assessed, while, in the following section, the meaning of the imposed revenue cap and its tie to the concession fee will be explained. An analysis of possible reasons for extremely high concession fees will be carried out, evaluating their possible impact on companies' profitability. In the last part of the work, a solution will be proposed in order to build an effective regulatory framework in which competition for the field could actually lead the market to efficiency.

As a new member state of the EU, Slovenia has been required to adopt EU legislation in full. The Slovenian electricity market has been partially opened since 2001. From 1 July 2007, when households became eligible customers, the electricity market opened fully. The electricity reforms carried out so far comprise of market liberalization, unbundling of activities, allowing regulated TPA, formation of an organized power market, adoption of incentive-based price cap regulation and the establishment of an independent regulatory body. The challenge that remains to be addressed is how to enhance competition in an electricity market that has a net importer position with limited cross-border capacity. Envisaged investments in generating and cross-border capacities will partially close the gap between domestic generation and consumption. Furthermore, since Slovenia has one of the largest levels of state ownership in the electricity sector among EU member states, privatization of electricity companies is envisaged in the near future.

This paper provides an outlook of the electricity market reform in Greece which started in 2001 and is still developing slowly. This is related to the persisting dominance of the incumbent company and the specificities of the electricity sector of Greece which is heavily dependent on indigenous lignite firing generation, while being located in the periphery of the EU internal electricity and gas markets. Competition through enhancing electricity trade in the region is limited to date, as the establishment of an internal market in South East Europe also progresses slowly. Development of competition through gas-firing generation by new entrants has been the priority adopted by State and Regulator's policies. However, the gas supply market in Greece and in the region still lags behind.

Turkish electricity reform has progressed slowly due to internal resistance against privatisation, and gained momentum after Electricity Market Law of 2001, prepared in line with EU Energy Acquis and established required institutional and legal framework. Although the eligibility threshold has reached 39% market opening rate, the dominant position of public both as owner and decision-maker is still the major problem in the sector. Currently Turkey is self-sufficient in electricity, but likely to face shortages in 10 years if the growing demand is not met by either speeding the liberalisation process, or joining the South East Europe Electricity Market.

This paper examines the changing role of government and market in regulating the telecommunications sector from since 1996 in Taiwan. It contextualises the theoretical aspects of regulatory governance for institutional design and practices, and reviews the concepts and mechanisms for appraising privatisation and regulatory systems. Using a conceptual framework for researching privatisation and regulation, it describes the process and issues pertinent to telecommunications liberalisation and privatisation in Taiwan, supported by a brief presentation of theoretical points of view as well as practitioners’ views. The paper presents results concerning criteria for appraising privatisation and regulatory governance and considers policy lessons that can be learned from the experiences of the Taiwanese telecommunications sector's liberalisation.

Over twenty years since electricity industry deregulation was first implemented, and nearly ten since many power systems boarded the liberalization train, reliability of supply appears to be the major concern of energy regulators. Drawing from the cumulative experience of systems that have already implemented some manner of security of supply mechanism, the present article reviews the main criteria to be taken into consideration in the design of a regulatory mechanism of this nature.

Despite considerable progress in understanding electricity markets and how best to introduce market reform, many design and implementation issues remain. At a more fundamental level, there is no consensus on which model would work best in a given situation and what constitutes a “functional” market.

As a result of European Directives 96/92 and 2003/54 on the liberalisation of the internal market for electricity, the Italian electricity sector has been subject to extensive institutional changes which have affected the competitive nature of the market. In this paper we attempt to assess the likely effect of these institutional changes on the Italian electricity industry, and focus particularly on the impact of the introduction of a centralised wholesale market. The assessment of the likely impact of these institutional changes is based on the comparison with the international experience of countries where extensive liberalisation measures have been implemented (such as the US, UK and the Scandinavian region). On the basis of this international comparison, we draw some lessons about how to promote effective competition in the Italian market and in other electricity markets which have not been fully liberalised.

Following an economic crisis in the late 1980s, Argentina became one of the first developing countries to fully implement policies of the ‘Washington Consensus’, including the liberalisation and privatisation of public utilities. However, the reform and economic growth that followed in the 1990s was eventually undermined by long-term recession and an economic collapse in late 2001, marked by national debt default and currency devaluation in early 2002. In the context of urban poverty and poverty reduction, this paper examines electricity market reform in Argentina, analysing the strengths, weaknesses and distributional impacts. The article raises some of the concerns local actors have of reform, including disproportionate costs to low-income consumers, and the legitimacy of the process itself as a possible barrier to the delivery of more equitable social benefits.

The spread of utility liberalisation and privatisation to middle and low income developing countries raises the problem of whether and how they can establish an effective regulatory capability or whether the supply of regulatory services is likely to be insufficient. The paper presents evidence on the size of electricity regulatory agencies in 24 mainly middle and lower income countries as well as the number of high-level, specialist regulatory staff and the potential resource pool from post-school education. The paper also discusses how far the problem can be alleviated and/or avoided by the use of regulation by contract, regulation by multi-national regulatory agency or contracting-out. The paper concludes that such solutions are unlikely to be generally effective but that informal exchanges of information and pooling of resources between national regulators on a market-driven basis, as seen in Southern Africa and the EU, is a promising option. The paper concludes by pointing to the need to ascertain the minimum required regulatory capability in developing countries as perceived by Governments and potential investors.

The most substantial changes and proposal for reform of the Italian electricity industry have been developed recently as a result of the need to transpose the EU directive on the liberalisation of the electricity market to the national level. Important reforms have been implemented in the recent law decree which transposes the EU directive. Several choices are still open for the government, the public incumbent, the regulatory and the antitrust authorities. We focus on the implications of the adoption of a double market system, of the liberalisation of the generation phase, and of the proposed reform of the tariff system.

This paper discusses the main issues affecting the regulatory governance of infrastructure industries and their implications for regulatory practice. The discussion covers the need for economic regulation under both state ownership and private ownership, as well as issues of regulatory commitment, including the role of concession contracts. It then discusses the theory of regulatory governance and its implications for institutional design. On the basis of this discussion, we derive a set of six criteria for appraising the performance of regulatory frameworks for infrastructure industries. These criteria are then applied to a set of twelve infrastructure industries in six developing Asian countries and we report the results of the appraisal, including trends towards convergence of regulatory frameworks and the implications for private investment. Among our main conclusions are (i) the importance of structural liberalisation as a catalyst for developing good practice regulation; and (ii) the importance of transparency for effective regulation.