Rethinking public service regulation after the crisis

Regulatory reform of utilities in the European Union (EU) from the 1980s, including liberalization and privatization, were supposed to bring about greater choice and quality, along with lower prices for consumers. And yet even the reform architects, the European Commission, admitted in 2008 that not all the supposed benefits of reform had borne fruit. One major concern is that citizens – cast as consumers – do not always take full advantage of the new array of services on offer. Behavioural Economics has been brought in by the Commission to help explain this. But how do citizens behave in the “market place” of public services? Analysing consumption patterns and expressions of satisfaction in two major EU countries – Spain and the UK – we show when and how socio-economic factors, including age, gender, place of residence and employment, affect public service consumption. Bottom-up regulatory policies, considering this heterogonous response - could be introduced to improve existing standard top-down models, in order to improve citizens’ decisions vis-à-vis public service consumption, ever more important in times of austerity and crisis.