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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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Citations

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Cited by:
  1. Francesco Vona & Francesco Nicolli, 2013. "Energy market liberalisation and renewable energy policies in OECD countries," Sciences Po publications 2013-10, Sciences Po.
  2. Erdogdu, E., 2012. "The political economy of electricity market liberalization: a cross-country approach," Cambridge Working Papers in Economics 1227, Faculty of Economics, University of Cambridge.
  3. Erdogdu, Erkan, 2013. "Essays on Electricity Market Reforms: A Cross-Country Applied Approach," MPRA Paper 47139, University Library of Munich, Germany.
  4. Nesta, Lionel & Vona, Francesco & Nicolli, Francesco, 2014. "Environmental policies, competition and innovation in renewable energy," Journal of Environmental Economics and Management, Elsevier, vol. 67(3), pages 396-411.
  5. Chang, Chun-Ping & Berdiev, Aziz N. & Lee, Chien-Chiang, 2013. "Energy exports, globalization and economic growth: The case of South Caucasus," Economic Modelling, Elsevier, vol. 33(C), pages 333-346.
  6. repec:spo:wpecon:info:hdl:2441/f6h8764enu2lskk9p544jc8op is not listed on IDEAS
  7. Menegaki, Angeliki N. & Ozturk, Ilhan, 2013. "Growth and energy nexus in Europe revisited: Evidence from a fixed effects political economy model," Energy Policy, Elsevier, vol. 61(C), pages 881-887.
  8. Niklas Potrafke, 2014. "The Evidence on Globalization," CESifo Working Paper Series 4708, CESifo Group Munich.

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