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The Institutions of Regulation: An Application to Public Utilities

In: Handbook of New Institutional Economics

Author

Listed:
  • Pablo T. Spiller

    (University of California)

  • Mariano Tommasi

    (Universidad San Andrés)

Abstract

Regulation is part of the complex web of a nation’s public policy. To understand regulatory design, then, it is imperative to understand the general determinants of public policy. The purpose of this essay is to highlight the usefulness of a transactional approach to public policy determination in understanding the origins, nature and the evolution of the institutions of regulation. As it merits an essay in a volume on the New Institutional Economics, we approach public policy as a (complex and often intertemporal) transaction among policy makers. As such, the nature and features of public policies are impacted by the type of contracts facilitated by the institutions—i.e., the rules of the political game—of the country in question. Here, then, we analyze the institutional determinants of regulatory policy making by looking at regulation as the outcome of complex intertemporal exchanges among policy makers. As in normal economic transactions, efficient intertemporal exchanges require safeguarding institutions. In their absence, we will observe the development of non-cooperative and shortterm behavior, inflexible rules to avoid political opportunism, and in general low quality regulatory policies.

Suggested Citation

  • Pablo T. Spiller & Mariano Tommasi, 2008. "The Institutions of Regulation: An Application to Public Utilities," Springer Books, in: Claude Ménard & Mary M. Shirley (ed.), Handbook of New Institutional Economics, chapter 20, pages 515-543, Springer.
    • Handle: RePEc:spr:sprchp:978-3-540-69305-5_21
    DOI: 10.1007/978-3-540-69305-5_21
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    Cited by:

    1. Hagen Worch & Bernhard Truffer & Mundia Kabinga & Jochen Markard & Anton Eberhard, 2012. "Tackling the Capability Gap in Utility Firms: Applying Management Research to Infrastructure Sectors," CID Working Papers 55, Center for International Development at Harvard University.
    2. Cheng, Chuntian & Chen, Fu & Li, Gang & Ristić, Bora & Mirchi, Ali & Qiyu, Tu & Madani, Kaveh, 2018. "Reform and renewables in China: The architecture of Yunnan's hydropower dominated electricity market," Renewable and Sustainable Energy Reviews, Elsevier, vol. 94(C), pages 682-693.
    3. Darryl S. L. Jarvis, 2010. "Institutional processes and regulatory risk: A case study of the Thai energy sector," Regulation & Governance, John Wiley & Sons, vol. 4(2), pages 175-202, June.
    4. Recuero Virto, Laura & Gasmi, Farid & Noumba Um, Paul, 2010. "Does political accountability matter for infrastructure regulation? The case of telecommunications," MPRA Paper 28496, University Library of Munich, Germany, revised 2010.
    5. Ghosh, Ranjan & Kathuria, Vinish, 2016. "The effect of regulatory governance on efficiency of thermal power generation in India: A stochastic frontier analysis," Energy Policy, Elsevier, vol. 89(C), pages 11-24.
    6. 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.
    7. Spiller, Pablo T., 2013. "Transaction cost regulation," Journal of Economic Behavior & Organization, Elsevier, vol. 89(C), pages 232-242.
    8. Mwakatumbula, Hilda Jacob & Moshi, Goodiel Charles & Mitomo, Hitoshi, 2019. "Consumer protection in the telecommunication sector: A comparative institutional analysis of five African countries," Telecommunications Policy, Elsevier, vol. 43(7), pages 1-1.
    9. Heikki Marjosola, 2021. "The problem of regulatory arbitrage: A transaction cost economics perspective," Regulation & Governance, John Wiley & Sons, vol. 15(2), pages 388-407, April.
    10. Mustafa Durakoglu, S., 2011. "Political institutions of electricity regulation: The case of Turkey," Energy Policy, Elsevier, vol. 39(9), pages 5578-5587, September.
    11. Worch, Hagen & Truffer, Bernhard & Kabinga, Mundia & Eberhard, Anton & Markard, Jochen, 2013. "A capability perspective on performance deficiencies in utility firms," Utilities Policy, Elsevier, vol. 25(C), pages 1-9.
    12. Falch, Morten & Henten, Anders, 2015. "European broadband policy – regulation vs. Facilitation," 26th European Regional ITS Conference, Madrid 2015 127138, International Telecommunications Society (ITS).
    13. Kimiagari, Salman & Mahbobi, Mohammad & Toolsee, Tushika, 2023. "Attracting and retaining FDI: Africa gas and oil sector," Resources Policy, Elsevier, vol. 80(C).
    14. Navroz K. Dubash & Bronwen Morgan, 2012. "Understanding the rise of the regulatory state of the South," Regulation & Governance, John Wiley & Sons, vol. 6(3), pages 261-281, September.
    15. Falch, Morten & Henten, Anders, 2018. "Dimensions of broadband policies and developments," Telecommunications Policy, Elsevier, vol. 42(9), pages 715-725.

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