IDEAS home Printed from https://ideas.repec.org/a/eee/juipol/v31y2014icp188-196.html
   My bibliography  Save this article

Independent regulation of government-owned monopolies: An oxymoron? The case of electricity distribution in Australia

Author

Listed:
  • Mountain, Bruce

Abstract

The network component of household electricity bills served by government-owned network service providers in Australia more than doubled between 2007 and 2013. Their regulated assets and profits more than tripled over this period. These outcomes have been delivered under a similar system of price cap regulation that has delivered quite different outcomes in Great Britain, and in Victoria (Australia) to the privately owned network service providers in that state. We conclude that changes in operating conditions, demand, customer numbers or reliability do not explain this. Rather we find that government ownership has undermined the authority and independence of economic regulation. The Australian experience in the regulation of government-owned electricity distributors casts doubt on the assumption that regulation can be entirely independent of government ownership, or would operate in the same way as for an entity in private ownership.

Suggested Citation

  • Mountain, Bruce, 2014. "Independent regulation of government-owned monopolies: An oxymoron? The case of electricity distribution in Australia," Utilities Policy, Elsevier, vol. 31(C), pages 188-196.
    • Handle: RePEc:eee:juipol:v:31:y:2014:i:c:p:188-196
    DOI: 10.1016/j.jup.2014.09.011
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0957178714000721
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jup.2014.09.011?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. George J. Stigler, 1971. "The Theory of Economic Regulation," Bell Journal of Economics, The RAND Corporation, vol. 2(1), pages 3-21, Spring.
    2. Garnaut,Ross, 2011. "The Garnaut Review 2011," Cambridge Books, Cambridge University Press, number 9781107691681, September.
    3. Bortolotti, Bernardo & Cambini, Carlo & Rondi, Laura, 2013. "Reluctant regulation," Journal of Comparative Economics, Elsevier, vol. 41(3), pages 804-828.
    4. John Pierce & Danny Price & Deirdre Rose, 1995. "The Performance of the NSW Electricity Supply Industry," RBA Annual Conference Volume (Discontinued), in: Palle Andersen & Jacqueline Dwyer & David Gruen (ed.),Productivity and Growth, Reserve Bank of Australia.
    5. Peltzman, Sam, 1976. "Toward a More General Theory of Regulation," Journal of Law and Economics, University of Chicago Press, vol. 19(2), pages 211-240, August.
    6. Ross, Stephen A, 1973. "The Economic Theory of Agency: The Principal's Problem," American Economic Review, American Economic Association, vol. 63(2), pages 134-139, May.
    7. John Kwoka, 2005. "The comparative advantage of public ownership: evidence from U.S. electric utilities," Canadian Journal of Economics, Canadian Economics Association, vol. 38(2), pages 622-640, May.
    8. Littlechild, Stephen, 2014. "The Customer Forum: Customer engagement in the Scottish water sector," Utilities Policy, Elsevier, vol. 31(C), pages 206-218.
    9. Mountain, Bruce & Littlechild, Stephen, 2010. "Comparing electricity distribution network revenues and costs in New South Wales, Great Britain and Victoria," Energy Policy, Elsevier, vol. 38(10), pages 5770-5782, October.
    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. Osvaldo Candido & Wilfredo L. Maldonado & Cintia L. M. Araujo, 2021. "Private or Public Enterprises? Cost Inefficiency Limits - An Application to Water Supply Companies in Brazil," Working Papers, Department of Economics 2021_09, University of São Paulo (FEA-USP).
    2. Peci, Alketa & D’Assunção, Márcio Leite & Holperin, Michelle Moretzsohn & de Souza, Celso Florêncio, 2017. "Regulation inside government: The challenges of regulating a government-owned utility," Utilities Policy, Elsevier, vol. 49(C), pages 61-70.

    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. Mountain, Bruce R., 2019. "Ownership, regulation, and financial disparity: The case of electricity distribution in Australia," Utilities Policy, Elsevier, vol. 60(C), pages 1-1.
    2. Söderberg, Magnus & Menezes, Flavio M. & Santolino, Miguel, 2018. "Regulatory behaviour under threat of court reversal: Theory and evidence from the Swedish electricity market," Energy Economics, Elsevier, vol. 71(C), pages 302-310.
    3. McShane, Michael K. & Cox, Larry A. & Butler, Richard J., 2010. "Regulatory competition and forbearance: Evidence from the life insurance industry," Journal of Banking & Finance, Elsevier, vol. 34(3), pages 522-532, March.
    4. Kwan, Simon H., 2003. "Impact of deposit rate deregulation in Hong Kong on the market value of commercial banks," Journal of Banking & Finance, Elsevier, vol. 27(12), pages 2231-2248, December.
    5. Mudambi, Ram & Paul, Chris, 2003. "Domestic drug prohibition as a source of foreign institutional instability: an analysis of the multinational extralegal enterprise," Journal of International Management, Elsevier, vol. 9(3), pages 335-349.
    6. Shapiro, Jesse M., 2016. "Special interests and the media: Theory and an application to climate change," Journal of Public Economics, Elsevier, vol. 144(C), pages 91-108.
    7. Jiang, Haiyan & Hu, Yuanyuan & Zhang, Honghui & Zhou, Donghua, 2018. "Benefits of Downward Earnings Management and Political Connection: Evidence from Government Subsidy and Market Pricing," The International Journal of Accounting, Elsevier, vol. 53(4), pages 255-273.
    8. Zingales, Luigi & Faccio, Mara, 2017. "Political Determinants of Competition in the Mobile Telecommunication Industry," CEPR Discussion Papers 11794, C.E.P.R. Discussion Papers.
    9. Giacomo Ponzetto, 2008. "Asymmetric information and trade policy," Economics Working Papers 1253, Department of Economics and Business, Universitat Pompeu Fabra, revised Oct 2010.
    10. Chong, Beng-Soon & Liu, Ming-Hua & Altunbas, Yener, 1996. "The impact of universal banking on the risks and returns of Japanese financial institutions," Pacific-Basin Finance Journal, Elsevier, vol. 4(2-3), pages 181-195, July.
    11. Hans B. Christensen & Luzi Hail & Christian Leuz, 2021. "Mandatory CSR and sustainability reporting: economic analysis and literature review," Review of Accounting Studies, Springer, vol. 26(3), pages 1176-1248, September.
    12. Nadeau, Louis W., 1997. "EPA Effectiveness at Reducing the Duration of Plant-Level Noncompliance," Journal of Environmental Economics and Management, Elsevier, vol. 34(1), pages 54-78, September.
    13. Рубинштейн Александр Яковлевич, "undated". "Методологический Анализ Теории Опекаемых Благ: Научный Доклад [methodological analysis of the Theory of Patronized Goods. Research report]," Working papers a:pru175:ye:2014:1, Institute of Economics.
    14. Anna Dimitrova, 2021. "Captured Energy Market Operation and Liberalization Efforts," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 7, pages 19-31.
    15. Ando, Amy W. & Getzner, Michael, 2006. "The roles of ownership, ecology, and economics in public wetland-conservation decisions," Ecological Economics, Elsevier, vol. 58(2), pages 287-303, June.
    16. Ruiz Díaz, Gonzalo, 2019. "Opportunism and third-party influence on long-term public contracts," Utilities Policy, Elsevier, vol. 61(C).
    17. Harold Mulherin, J., 2007. "Measuring the costs and benefits of regulation: Conceptual issues in securities markets," Journal of Corporate Finance, Elsevier, vol. 13(2-3), pages 421-437, June.
    18. Li, Kai & Long, Cheryl & Wan, Wei, 2019. "Public interest or regulatory capture: Theory and evidence from China’s airfare deregulation," Journal of Economic Behavior & Organization, Elsevier, vol. 161(C), pages 343-365.
    19. Rafael Di Tella & Robert MacCulloch, 2009. "Why Doesn't Capitalism Flow to Poor Countries?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 40(1 (Spring), pages 285-332.
    20. Brooks, Jonathan, 1995. "Policies and institutions in transition economies: a political economy perspective on the agri-food sector," Food Policy, Elsevier, vol. 20(6), pages 487-500, December.

    More about this item

    Keywords

    Independent regulation; Ownership and regulation; Electricity distribution; Price cap regulation;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

    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:eee:juipol:v:31:y:2014:i:c:p:188-196. See general information about how to correct material in RePEc.

    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: Catherine Liu (email available below). General contact details of provider: https://www.sciencedirect.com/journal/utilities-policy .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.