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The political economy of energy regulation in OECD countries

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  • Chang, Chun Ping
  • Berdiev, Aziz N.

Abstract

This paper examines the effect of government ideology, political factors and globalization on energy regulation in electricity and gas industries using the bias-corrected least square dummy variable model in a panel of 23 OECD countries over the period of 1975-2007. We find that left-wing governments promote regulation in gas and electricity sectors. Also, less politically fragmented institutions contribute to deregulation of gas and electricity industries. Long tenures of incumbent government have limited impact on regulation in electricity sector, while it is associated with an increase in regulation of gas sector. Further, we find that higher political constraints and more globalized countries lead to deregulation in electricity and gas sectors. We discover that economic and social integration are the forces that promote deregulation in the gas industry, whereas political integration advance deregulation in the electricity industry. We emphasize that political economy factors are important determinants of energy regulation.

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Bibliographic Info

Article provided by Elsevier in its journal Energy Economics.

Volume (Year): 33 (2011)
Issue (Month): 5 (September)
Pages: 816-825

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Handle: RePEc:eee:eneeco:v:33:y:2011:i:5:p:816-825

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Web page: http://www.elsevier.com/locate/eneco

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Keywords: Political economy Government ideology Globalization Energy regulation;

References

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Cited by:
  1. Lionel Nesta & Francesco Vona & Francesco Nicolli, 2012. "Environmental Policies, Product Market Regulation and Innovation in Renewable Energy," Working Papers 2012.90, Fondazione Eni Enrico Mattei.
  2. Erdogdu, Erkan, 2011. "The political economy of electricity market liberalization: a cross-country approach," MPRA Paper 33724, University Library of Munich, Germany.

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