IDEAS home Printed from https://ideas.repec.org/p/mil/wpdepa/2009-09.html
   My bibliography  Save this paper

Privatization, unbundling, and liberalization of network industries:a discussion of the dominant policy paradigm in the EU

Author

Listed:
  • Lidia CERIANI
  • Raffaele DORONZO
  • Massimo FLORIO

Abstract

In this paper we examine the emergence over the last two decades in the EU of a dominant policy paradigm on the reform of network industries. We consider the broad recommendations by the OECD and the European Commission, and the Directives adopted by the European Union on the reform of some public services, such as electricity, gas, and telecom. These recommendations, in their strongest form, advocate the divestiture of public ownership (openly by the OECD, but not by the EC), unbundling (by both organizations, but with differences across sectors), liberalization (again by both organization, but with variations in the role of market regulation). We contrast the predictions and prescriptions of the paradigm, with a theoretical discussion of the welfare impact of the reforms. This discussion, based on a review of some standard microeconomic assumptions on the role of ownership, economies of scale and scope, governance, and market forms, shows that the dominant policy paradigm oversimplifies a very complex story. We suggest that the actual success of the reform is conditional to a large number of economic and institutional factors, and that it is far from obvious that the adoption of the same policy pattern in any and all the EU countries is always welfare improving. Empirical analysis does not support the paradigm.

Suggested Citation

  • Lidia CERIANI & Raffaele DORONZO & Massimo FLORIO, 2009. "Privatization, unbundling, and liberalization of network industries:a discussion of the dominant policy paradigm in the EU," Departmental Working Papers 2009-09, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
  • Handle: RePEc:mil:wpdepa:2009-09
    as

    Download full text from publisher

    File URL: http://wp.demm.unimi.it/files/wp/2009/DEMM-2009_009wp.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Johan Willner & David Parker, 2007. "The Performance of Public and Private Enterprise under Conditions of Active and Passive Ownership and Competition and Monopoly," Journal of Economics, Springer, vol. 90(3), pages 221-253, April.
    2. Ambra Poggi & Massimo Florio, 2007. "Utilities deprivation dynamics and energy sector reforms in Europe," LABORatorio R. Revelli Working Papers Series 60, LABORatorio R. Revelli, Centre for Employment Studies.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Andrea ZATTI, 2012. "New Organizational Models In European Local Public Transport: From Myth To Reality," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 83(4), pages 533-559, December.
    2. Judith Clifton & Daniel Díaz‐Fuentes & Marcos Fernández‐Gutiérrez & Julio Revuelta, 2011. "Is Market‐Oriented Reform Producing A ‘Two‐Track’ Europe? Evidence From Electricity And Telecommunications," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 82(4), pages 495-513, December.
    3. Mildred E. Warner, 2012. "Does Local Government Size Matter? Privatization and Hybrid Systems of Local Service Delivery," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1212, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    4. Santiago Lago-Peñas & Jorge Martinez-Vazquez (ed.), 2013. "The Challenge of Local Government Size," Books, Edward Elgar Publishing, number 15294.
    5. Andrea ZATTI, 2011. "Organizational models in European local public transport: is the new paradigm really dominant," Departmental Working Papers 2011-29, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    6. Mildred E. Warner, 2011. "Club Goods and Local Government," Journal of the American Planning Association, Taylor & Francis Journals, vol. 77(2), pages 155-166, April.
    7. Mildred E. Warner, 2013. "Does local government size matter? Privatization and hybrid systems of local service delivery," Chapters, in: Santiago Lago-Peñas & Jorge Martinez-Vazquez (ed.), The Challenge of Local Government Size, chapter 11, pages 263-288, Edward Elgar Publishing.

    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. Johan Willner & Sonja Gronblom, 2016. "The organisation of services of general interest in Finland," ECONOMIA PUBBLICA, FrancoAngeli Editore, vol. 2016(3), pages 89-116.
    2. Oum, Tae H. & Yan, Jia & Yu, Chunyan, 2008. "Ownership forms matter for airport efficiency: A stochastic frontier investigation of worldwide airports," Journal of Urban Economics, Elsevier, vol. 64(2), pages 422-435, September.
    3. Johan WILLNER & Sonja GRÖNBLOM, 2017. "Public Enterprises – Objectives and Performance," Departmental Working Papers 2017-03, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    4. Alessandra Chirco & Marcella Scrimitore, 2017. "Privatization in an International Mixed Oligopoly: the Role of Product Differentiation under Price Competition," EERI Research Paper Series EERI RP 2017/06, Economics and Econometrics Research Institute (EERI), Brussels.
    5. Johan WILLNER & Sonja GRÖNBLOM, 2011. "Reforming a network industry: consequences for cost efficiency and welfare," Departmental Working Papers 2011-33, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    6. Johan Willner, 2010. "Public Options and Altruistic Firms - Antitrust Targets or Tools? The Welfare Impact of a Mixed Oligopoly With Managerial firms," Discussion Papers 59, Aboa Centre for Economics.
    7. Clifton, Judith & Fuentes, Daniel Diaz & Warner, Mildred, 2016. "The loss of public values when public shareholders go abroad," Utilities Policy, Elsevier, vol. 40(C), pages 134-143.
    8. Alari Paulus & Holly Sutherland & Panos Tsakloglou, 2010. "The distributional impact of in-kind public benefits in European countries," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 29(2), pages 243-266.
    9. Sonja GRÖNBLOM & Johan WILLNER, 2008. "Privatization And Liberalization: Costs And Benefits In The Presence Of Wage‐Bargaining," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 79(1), pages 133-160, March.
    10. Johan Willner & Sonja Grönblom, 2021. "Quality provision under conditions of oligopoly," Journal of Economics, Springer, vol. 132(2), pages 103-131, March.
    11. Johan Willner, 2013. "The welfare impact of a managerial oligopoly with an altruistic firm," Journal of Economics, Springer, vol. 109(2), pages 97-115, June.
    12. Antal, Miklós, 2020. "A “parasite market”: A competitive market of energy price comparison websites reduces consumer welfare," Energy Policy, Elsevier, vol. 138(C).
    13. Giuseppe Cinquegrana & Serena Migliardo & Domenico Sarno, 2016. "Comparative analysis of private and public provision of the water and waste services by the Italian municipalities," ECONOMIA PUBBLICA, FrancoAngeli Editore, vol. 2016(3), pages 149-176.
    14. Johan WILLNER & Sonja GRÖNBLOM, 2015. "The Organisation of Services of General Interest in Finland," CIRIEC Working Papers 1520, CIRIEC - Université de Liège.
    15. lo Storto, Corrado, 2018. "Ownership structure and the technical, cost, and revenue efficiency of Italian airports," Utilities Policy, Elsevier, vol. 50(C), pages 175-193.
    16. Hall, Derek, 2010. "Transport geography and new European realities: a critique," Journal of Transport Geography, Elsevier, vol. 18(1), pages 1-13.
    17. Ofelia Betancor & María Paz Espinosa, 2015. "Privatización, competencia y regulación aeroportuaria:experiencia internacional," Working Papers 2015-03, FEDEA.

    More about this item

    Keywords

    Privatization; unbundling; liberalization; network industries;
    All these keywords.

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:mil:wpdepa:2009-09. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/damilit.html .

    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: DEMM Working Papers The email address of this maintainer does not seem to be valid anymore. Please ask DEMM Working Papers to update the entry or send us the correct address (email available below). General contact details of provider: https://edirc.repec.org/data/damilit.html .

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.