Regulatory reform and productivity growth in the UK's public utilities

Bishop, Matthew; Thompson, David

doi:10.1080/00036849200000127

Cited by 84 publications

(49 citation statements)

References 16 publications

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“…A number of methodologies have been used to assess the impact of liberalisation, for example based on price or cost comparisons, as used by Yarrow (1992) and Bishop and Thompson (1992), or using simulation or frontier approaches, such as Burns and…”

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confidence: 99%

The restructuring and privatisation of British Rail: was it really that bad?

Pollitt

Smith

2002

Fiscal Studies

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This paper uses a social cost-benefit analysis (SCBA) framework to assess whether rail privatisation in Britain has produced savings in operating costs. The paper shows that major efficiencies have been achieved, consumers have benefited through lower prices, whilst the increased government subsidy has been largely recouped through privatisation proceeds. We also find that output quality is no lower (and is probably better) than under the counterfactual scenario of public ownership (pre-Hatfield). The achievement of further savings is key to delivering improved rail services in the future. This paper finds that a privatised structure, where shareholders demand a return on their investment, has led to significant improvements in operating efficiency -it remains to be seen whether the new regime, with a not-for-profit infrastructure owner, will deliver the same efficiency improvements.JEL classification: H43, L92. * Pollitt and Smith are both at the Judge Institute of Management, University of Cambridge. Smith is funded by the Railtrack Studentship in Rail Regulation. The authors wish to thank Luisa Affuso for kindly sharing data with us (data which was generated during a rail research project sponsored by the ESRCgrant number: R000237928). The authors also acknowledge comments from David Newbery, Luisa Affuso, Stephen Gibson and two anonymous referees. All remaining errors are the responsibility of the authors. I: IntroductionOver the period 1994-1997 the British railway industry was fundamentally transformed.In 1994 the industry was in the hands of a single, vertically-integrated operator -British Rail -owned by the government. By 1997, BR's activities had been transferred to the private sector. In the process, the industry was restructured into more than one hundred companies, thereby removing much of the vertical and horizontal integration of the preprivatisation structure.Since its reorganisation, and subsequent transfer to the private sector, the rail industry's outputs have grown sharply. Between 1992/93 (the last year before restructuring began 1 ) and 1999/00, passenger miles and freight tonne-miles grew by 21%and 19% respectively, whilst train miles were also up significantly (passenger train miles grew by 13% over the period). During this same period, total industry operating costs 2 fell by nearly 6%, suggesting that significant efficiency improvements have been made.However, the privatisation of British Rail has been the subject of much criticism in recent years, particularly in the aftermath of the Hatfield accident 3 . In October 2001 the Government announced that it had decided to put Railtrack into administration -with the company to be replaced by a not-for-profit company, limited by guarantee. Railtrack's finances had been crippled by the cost of Hatfield, and cost over-runs on the West Coast Main Line project 4 .1 See Section III.2 (a). 2 Operating costs (excluding depreciation). 3 A train derailment resulting from defective track, which resulted in four people being killed. 4 The ren...

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The restructuring and privatisation of British Rail: was it really that bad?

Pollitt

Smith

2002

Fiscal Studies

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“…Unlike a private shareholder, the LGs might acquire a right to exercise a degree of influence over the management of LPUs beyond that to which its shareholding status would otherwise entitle it. The essential idea should be to appoint directors who would be expected to pursue strategies which are in the public interest rather than strategies which focuses exclusively on the controlling shareholders interest (Bishop and Thompson, 1992).…”

Section: Discussion and Findingsmentioning

confidence: 99%

Governance Structures and Mechanisms in Public Service Organizations Theories, Evidence and Future Directions

Calabrò

2011

SSRN Journal

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“…En effet, prés du tiers de ces études présente des résul-tats mixtes. À cet effet, Yarrow (1986), Bishop et Kay (1989), Bishop et Thompson (1992) ainsi que Parker et Martin (1995) démontrent que la performance croît de manière importante dans la phase précédant la privatisation. Or, il semblerait que cette amélioration de la performance soit le fait de certains remaniements administratifs qui sont généralement institués en vue de préparer la privatisation.…”

Section: Les Approches De Comparaisonunclassified

L’analyse comparative de la performance entre les entreprises publiques et les entreprises privées : le problème de mesure et son impact sur les résultats

Bozec¹

2006

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RésuméDe nombreuses recherches ont été réalisées au cours des 30 dernières années pour vérifier si la forme de propriété a un effet déterminant sur la performance. Cette étude met en lumière le problème de mesure qui caractérise ce type de recherche et qui découle des disparités, parfois importantes, entre les objectifs poursuivis par les entreprises publiques et les entreprises privées. Nous procédons à une revue des études empiriques dans le domaine en prenant soin d’identifier les situations où le problème de mesure est le plus manifeste. Nous en évaluons l’impact sur les résultats. Dans l’ensemble, les résultats de notre analyse suggèrent que les différences d’objectifs entre les entreprises expliquent en partie leurs différences de performance.

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Regulatory reform and productivity growth in the UK's public utilities

Cited by 84 publications

References 16 publications

The restructuring and privatisation of British Rail: was it really that bad?

The restructuring and privatisation of British Rail: was it really that bad?

Governance Structures and Mechanisms in Public Service Organizations Theories, Evidence and Future Directions

L’analyse comparative de la performance entre les entreprises publiques et les entreprises privées : le problème de mesure et son impact sur les résultats

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