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

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Author Info

  • 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.

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File URL: http://mpra.ub.uni-muenchen.de/33046/
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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 33038.

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Date of creation: 2009
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Handle: RePEc:pra:mprapa:33038

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Related research

Keywords: Regulation; Infrastructure; Public Service; Consumer behaviour. European Union;

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References

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  1. Judith Clifton & Francisco Comín & Daniel Díaz Fuentes, 2005. "‘Empowering Europe'S Citizens’?," Public Management Review, Taylor & Francis Journals, vol. 7(3), pages 417-443, September.
  2. Emanuele BACCHIOCCHI & Massimo FLORIO & Marco GAMBARO, 2008. "Telecom prices, regulatory reforms, and consumers? satisfaction: evidence for 15 EU countries," Departmental Working Papers 2008-10, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano, revised 20 Jun 2008.
  3. Carlo Vittorio FIORIO & Massimo FLORIO, 2008. "Do you pay a fair price for electricity? Consumers? satisfaction and utility reform in the EU," Departmental Working Papers 2008-12, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
  4. Kahneman, Daniel, 2002. "Maps of Bounded Rationality," Nobel Prize in Economics documents 2002-4, Nobel Prize Committee.
  5. Steven Van de Walle, 2006. "The impact of public service values on services of general interest reform debates," Public Management Review, Taylor & Francis Journals, vol. 8(2), pages 183-205, June.
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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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