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Utilities: deregulated or re-regulated?


  • Jiří Schwarz


This article addresses the restructuration of the utilities sector/industry, a process generally described as deregulation. At the core of deregulation processes, not only in the EU, but also in the US, lies the replacement of old-fashioned forms of state regulation based on ownership control by new forms of regulation based on the operation of an independent regulatory body. In Central and Eastern European countries undergoing economic transition, surviving communist-type behavior, along with half-implemented EU deregulation directives, have led to specifically re-regulated utility markets. The new forms of regulation applied in the process of deregulation have served only to preserve the market protection of former state monopolies. Regulators who manage deregulation processes in the EU style allocate benefits across organized producer and consumer groups, so that the regulators' total utility is maximized.

Suggested Citation

  • Jiří Schwarz, 2003. "Utilities: deregulated or re-regulated?," Prague Economic Papers, University of Economics, Prague, vol. 2003(1).
  • Handle: RePEc:prg:jnlpep:v:2003:y:2003:i:1:id:206

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    References listed on IDEAS

    1. Alan J. Auerbach & Joel Slemrod, 1997. "The Economic Effects of the Tax Reform Act of 1986," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 589-632, June.
    2. Deniz Çiçek & Ceyhun Elgin, 2011. "Cyclicality of fiscal policy and the shadow economy," Empirical Economics, Springer, vol. 41(3), pages 725-737, December.
    3. David Mayes & Matti Virén, 2000. "The exchange rate and monetary conditions in the Euro area," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 136(2), pages 199-231, June.
    4. Aloys Prinz & Hanno Beck, 2012. "In the Shadow of Public Debt: Are there Relations between Public Debt and the Shadow Economy?," Economic Analysis and Policy, Elsevier, vol. 42(2), pages 221-236, September.
    5. Aizenman, Joshua & Kletzer, Kenneth, 2007. "Economic Growth with Constraints on Tax Revenues and Public Debt: Implications for Fiscal Policy and Cross-Country Differences," Santa Cruz Department of Economics, Working Paper Series qt9421k9hq, Department of Economics, UC Santa Cruz.
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    More about this item


    captive customer; cross-subsidy; deregulation; interest group; natural monopoly; public service; re-regulation; regulator; regulatory failure; rent-seeking process;

    JEL classification:

    • B29 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Other
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L59 - Industrial Organization - - Regulation and Industrial Policy - - - Other
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy


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