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Reflections on RPI-X regulation in OECD countries

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  • Mirrlees-Black, Jonathan

Abstract

The form of regulation initially proposed by the Littlechild (1983) report has not only been implemented in UK regulated industries, but has also become a benchmark approach to regulation worldwide. RPI-X has been widely adopted in different industries in OECD countries both to incentivise efficiency and also to support privatisation, and this paper shows the breadth of countries and industries in which it has been applied. It has also contributed to the development of infrastructure as a separate asset class. It is difficult to overstate the long-term impact of the 1983 paper. However, the precise way in which RPI-X regulation is implemented differs widely. On occasions, a price control process is implemented largely because it is a well-respected benchmark approach, but with less appreciation of the intended objectives. Designers of regulatory frameworks would do well to recall the analysis in the original Littlechild paper which highlighted that regulation is not an end in itself, but a means to an end, and successful applications of the framework respect this.

Suggested Citation

  • Mirrlees-Black, Jonathan, 2014. "Reflections on RPI-X regulation in OECD countries," Utilities Policy, Elsevier, vol. 31(C), pages 197-202.
    • Handle: RePEc:eee:juipol:v:31:y:2014:i:c:p:197-202
    DOI: 10.1016/j.jup.2014.09.010
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    References listed on IDEAS

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    1. Commission, Productivity, 2011. "Australian’s Urban Water Sector," Inquiry Reports, Productivity Commission, Government of Australia, volume 2, number 55, July.
    2. Stern, Jon, 2014. "The British utility regulation model: Its recent history and future prospects," Utilities Policy, Elsevier, vol. 31(C), pages 162-172.
    3. Kuosmanen, Timo, 2012. "Stochastic semi-nonparametric frontier estimation of electricity distribution networks: Application of the StoNED method in the Finnish regulatory model," Energy Economics, Elsevier, vol. 34(6), pages 2189-2199.
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    Cited by:

    1. Oduro, Richard A. & Taylor, Peter G., 2023. "Future pathways for energy networks: A review of international experiences in high income countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 171(C).
    2. Surbhi Gupta & Anil Kumar Sharma, 2022. "Evolution of infrastructure as an asset class: a systematic literature review and thematic analysis," Journal of Asset Management, Palgrave Macmillan, vol. 23(3), pages 173-200, May.
    3. Kasiri, Mohammadreza & Mirnezami, Seyed Reza, 2023. "How can the compensation structure of Iran's natural gas distribution services be modified based on incentive-based regulations?," Energy, Elsevier, vol. 285(C).
    4. Stephen Hall & Andrew EG Jonas & Simon Shepherd & Zia Wadud, 2019. "The smart grid as commons: Exploring alternatives to infrastructure financialisation," Urban Studies, Urban Studies Journal Limited, vol. 56(7), pages 1386-1403, May.
    5. Thiago Victorino & Carlos Rosano Peña, 2023. "The Development of Efficiency Analysis in Transportation Systems: A Bibliometric and Systematic Review," Sustainability, MDPI, vol. 15(13), pages 1-32, June.
    6. Heims, Eva M. & Lodge, Martin, 2018. "Customer engagement in UK water regulation: towards a collaborative regulatory state?," LSE Research Online Documents on Economics 87258, London School of Economics and Political Science, LSE Library.
    7. Avdasheva, Svetlana & Gimadi, Victoria, 2019. "Investor response to tariff options under regulation by contract: Evidence from Russian heating concessions," Utilities Policy, Elsevier, vol. 57(C), pages 67-74.

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