IDEAS home Printed from https://ideas.repec.org/a/gam/jscscx/v7y2018i4p57-d139629.html
   My bibliography  Save this article

The European Natural Gas Market Reforms Revisited: Differentiating between Regulatory Output and Outcome

Author

Listed:
  • Nicole Herweg

    (Department of Political Science, University of Heidelberg, Heidelberg 69115, Germany)

  • Stefan Wurster

    (Bavarian School of Public Policy, Technical University of Munich, München 80333, Germany)

  • Kathrin Dümig

    (Department of Political Science, University of Heidelberg, Heidelberg 69115, Germany)

Abstract

The article addresses the question of how successful the European natural gas reforms of 1998, 2003, and 2009 have been in terms of increasing competition in the sector. We argue that regulatory provisions are policy output variables, which as such do not affect competition directly. However, successful reforms can have an impact on the market structure, which might lead to increased competition and price reductions. Thus, it is pivotal to differentiate between policy output and outcome variables. Therefore, we first conduct a cross-sectional analysis of the regulatory impact on the market structure. Second, we apply error-correction models to test whether changes in the market structure affected the price development. Our findings suggest that the market reforms were successful in terms of liberalizing the sector, whereas the market structure did not affect the natural gas prices. Thus, we see a “successful failure” of the European natural gas market reforms.

Suggested Citation

  • Nicole Herweg & Stefan Wurster & Kathrin Dümig, 2018. "The European Natural Gas Market Reforms Revisited: Differentiating between Regulatory Output and Outcome," Social Sciences, MDPI, vol. 7(4), pages 1-19, April.
    • Handle: RePEc:gam:jscscx:v:7:y:2018:i:4:p:57-:d:139629
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2076-0760/7/4/57/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2076-0760/7/4/57/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Buchan, David & Keay, Malcolm, 2016. "Europe's Long Energy Journey: Towards an Energy Union?," OUP Catalogue, Oxford University Press, number 9780198753308.
    2. Robinson, Terry, 2007. "Have European gas prices converged?," Energy Policy, Elsevier, vol. 35(4), pages 2347-2351, April.
    3. Beck, Nathaniel & Katz, Jonathan N., 1995. "What To Do (and Not to Do) with Time-Series Cross-Section Data," American Political Science Review, Cambridge University Press, vol. 89(3), pages 634-647, September.
    4. Jan Zielonka, 2007. "Plurilateral Governance in the Enlarged European Union," Journal of Common Market Studies, Wiley Blackwell, vol. 45(1), pages 187-209, March.
    5. Jan Zielonka, 2007. "Plurilateral Governance in the Enlarged European Union," Journal of Common Market Studies, Wiley Blackwell, vol. 45, pages 187-209, March.
    6. Tooraj Jamasb and Michael Pollitt, 2005. "Electricity Market Reform in the European Union: Review of Progress toward Liberalization & Integration," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 11-42.
    7. Matthew Gorton & Carmen Hubbard & Lionel Hubbard, 2009. "The Folly of European Union Policy Transfer: Why the Common Agricultural Policy (CAP) Does Not Fit Central and Eastern Europe," Regional Studies, Taylor & Francis Journals, vol. 43(10), pages 1305-1317, December.
    8. Rinaldo Brau & Raffaele Doronzo & Carlo V. Fiorio & Massimo Florio, 2010. "EU Gas Industry Reforms and Consumers' Prices," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 167-182.
    9. Paul Conway & Giuseppe Nicoletti, 2006. "Product Market Regulation in the Non-Manufacturing Sectors of OECD Countries: Measurement and Highlights," OECD Economics Department Working Papers 530, OECD Publishing.
    10. Stephen Padgett, 1992. "The Single European Energy Market: The Politics of Realization," Journal of Common Market Studies, Wiley Blackwell, vol. 30(1), pages 53-76, March.
    11. Stern, Jonathan, 2014. "International gas pricing in Europe and Asia: A crisis of fundamentals," Energy Policy, Elsevier, vol. 64(C), pages 43-48.
    12. Anne Neumann & Boriss Siliverstovs & Christian von Hirschhausen, 2006. "Convergence of European spot market prices for natural gas? A real-time analysis of market integration using the Kalman Filter," Applied Economics Letters, Taylor & Francis Journals, vol. 13(11), pages 727-732.
    13. M. Florio & Rinaldo Brau & R. Doronzo, 2008. "Gas industry reforms and consumers' prices in the European Union," Working Paper CRENoS 200816, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    14. Wright, Philip, 2006. "Gas Prices in the UK: Markets and Insecurity of Supply," OUP Catalogue, Oxford University Press, number 9780199299652.
    15. Christian Growitsch & Marcus Stronzik, 2014. "Ownership unbundling of natural gas transmission networks: empirical evidence," Journal of Regulatory Economics, Springer, vol. 46(2), pages 207-225, October.
    16. Jacques Pelkmans, 2010. "Product Market Reforms in EU countries. Are the methodology and evidence sufficiently robust?," Bruges European Economic Research Papers 17, European Economic Studies Department, College of Europe.
    17. N. Haase & H. Bressers, 2010. "New Market Designs and their Effect on Economic Performance in European Union's Natural Gas Markets," Competition and Regulation in Network Industries, Intersentia, vol. 11(2), pages 176-207, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bastianin, Andrea & Galeotti, Marzio & Polo, Michele, 2019. "Convergence of European natural gas prices," Energy Economics, Elsevier, vol. 81(C), pages 793-811.
    2. Bastianin, Andrea & Castelnovo, Paolo & Florio, Massimo, 2018. "Evaluating regulatory reform of network industries: a survey of empirical models based on categorical proxies," Utilities Policy, Elsevier, vol. 55(C), pages 115-128.
    3. Christian Growitsch & Marcus Stronzik, 2014. "Ownership unbundling of natural gas transmission networks: empirical evidence," Journal of Regulatory Economics, Springer, vol. 46(2), pages 207-225, October.
    4. Sven Heim, Bastian Krieger, and Mario Liebensteiner, 2020. "Unbundling, Regulation, and Pricing: Evidence from Electricity Distribution," The Energy Journal, International Association for Energy Economics, vol. 0(Special I).
    5. Andrea Bastianin & Paolo Castelnovo & Massimo Florio, 2017. "The Empirics of Regulatory Reforms Proxied by Categorical Variables: Recent Findings and Methodological Issues," Working Papers 2017.22, Fondazione Eni Enrico Mattei.
    6. Growitsch, Christian & Stronzik, Marcus, 2011. "Ownership Unbundling of Gas Transmission Networks - Empirical Evidence," EWI Working Papers 2011-7, Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI).
    7. Victor Ajayi & Geoffroy Dolphin & Karim Anaya & Michael Pollitt, 2020. "The Productivity Puzzle in Network Industries: Evidence from the Energy Sector," Working Papers EPRG2021, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    8. Iweta Opolska, 2016. "Liberalisation of the gas industry in Europe.Does the European Union support efficacious regulatory solutions?," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 44.
    9. Victor Ajai & Karim Anaya & Geoffroy Dolphin & Michael Pollitt, 2022. "Do climate policies explain the productivity puzzle? Evidence from the Energy Sector," Working Papers 016, The Productivity Institute.
    10. Marino, Marianna & Parrotta, Pierpaolo & Valletta, Giacomo, 2019. "Electricity (de)regulation and innovation," Research Policy, Elsevier, vol. 48(3), pages 748-758.
    11. Böckers, Veit & Heimeshoff, Ulrich, 2014. "The extent of European power markets," Energy Economics, Elsevier, vol. 46(C), pages 102-111.
    12. Govorukha, Kristina & Mayer, Philip & Rübbelke, Dirk & Vögele, Stefan, 2020. "Economic disruptions in long-term energy scenarios – Implications for designing energy policy," Energy, Elsevier, vol. 212(C).
    13. Anderton, Robert & Di Lupidio, Benedetta & Jarmulska, Barbara, 2020. "The impact of product market regulation on productivity through firm churning: Evidence from European countries," Economic Modelling, Elsevier, vol. 91(C), pages 487-501.
    14. Bena Jan & Ondko Peter & Vourvachaki Evangelia, 2011. "Productivity Gains from Services Liberalization in Europe," EERC Working Paper Series 11/15e, EERC Research Network, Russia and CIS.
    15. Beetz, Jan Pieter & Rossi, Enzo, 2015. "EU legitimacy in a realist key," Discussion Papers, Center for Global Constitutionalism SP IV 2015-802, WZB Berlin Social Science Center.
    16. Stefan Auer, 2010. "'New Europe': Between Cosmopolitan Dreams and Nationalist Nightmares," Journal of Common Market Studies, Wiley Blackwell, vol. 48, pages 1163-1184, November.
    17. Vincenzo Galasso, 2014. "The role of political partisanship during economic crises," Public Choice, Springer, vol. 158(1), pages 143-165, January.
    18. Michael L. Polemis & Thanasis Stengos, 2017. "Electricity Sector Performance: A Panel Threshold Analysis," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    19. Castagneto-Gissey, G. & Chavez, M. & De Vico Fallani, F., 2014. "Dynamic Granger-causal networks of electricity spot prices: A novel approach to market integration," Energy Economics, Elsevier, vol. 44(C), pages 422-432.
    20. Papież, Monika & Rubaszek, Michał & Szafranek, Karol & Śmiech, Sławomir, 2022. "Are European natural gas markets connected? A time-varying spillovers analysis," Resources Policy, Elsevier, vol. 79(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jscscx:v:7:y:2018:i:4:p:57-:d:139629. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.