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Infrastructure regulation: what works, why, and how do we know?

Author

Listed:
  • Clifton, Judith
  • Díaz-Fuentes, Daniel
  • Fernández Gutiérrez, Marcos
  • Revuelta, Julio

Abstract

Public infrastructure services have been subject to dramatic regulatory reform since the 1980s in the European Union, particularly privatization, at the national level, and increased liberalization and deregulation, via the Single Market Programme. Despite this ambitious reform programme, there are signs that regulation is not always working. The Commission itself has recognised the limits of reform undertaken so far. Recently, it drew up a list of 23 sectors which were both crucial for economic growth and significantly “malfunctioning” in the Single Market. This list included major public infrastructure services - energy, gas, telecommunications and transportation. Work is ongoing to identify the causes of this “malfunctioning” and it is intended that new regulation will be implemented to improve this situation. As part of efforts to make these markets perform better, policy-makers are turning their attention to better understanding the consumer. Previously, regulation was usually based on that economic theory which assumed consumers were rational and selfish, but this is now being questioned using insights from Behavioural Economics. The Directorate General for Health and Consumers is moving towards a more eclectic approach to economics. In this light, this paper analyses regulatory reform of public infrastructure services from a user-consumer perspective. Stated (derived from Eurobarometer) and revealed (Household Budget Survey) preferences of consumers as regards public services are analyzed with a view to better understanding consumer behaviour. By contrasting stated and revealed preferences, new insight into consumer behaviour can be gained for use in the design of future regulation of infrastructure services in many countries world-wide. The new evidence generated can be used as a basis for the development of new consumer or user-related regulation.

Suggested Citation

  • Clifton, Judith & Díaz-Fuentes, Daniel & Fernández Gutiérrez, Marcos & Revuelta, Julio, 2009. "Infrastructure regulation: what works, why, and how do we know?," MPRA Paper 33038, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:33038
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Filippo Belloc & Antonio Nicita & Pier Luigi Parcu, 2011. "Deregulating Telecommunications in Europe: Timing, Path-Dependency, and Institutional Complementarities," RSCAS Working Papers 2011/47, European University Institute.

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    More about this item

    Keywords

    Regulation; Infrastructure; Public Service; Consumer behaviour. European Union;
    All these keywords.

    JEL classification:

    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
    • D18 - Microeconomics - - Household Behavior - - - Consumer Protection
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy

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