The 3 Rs: Regulation, risk and responsibility in British utilities since 1945

Abstract

Before privatisation, required rates of return and test discount rates were being applied to utility and other nationalised industries. One effect of this new approach was to promote more marginal-cost based tariffs which could fall particularly heavily on low-income groups. This trend was reinforced by privatisation which, when accompanied by market liberalisation, increased uncertainty about the likely returns on capital investment projects. Both of these issues, the treatment of poverty and coping with uncertainty, were of long-standing concern to the Austrian school of economics. Where Austrian economists differed from liberalising governments was in their locating of responsibility.

Energy market liberalization and renewable energy policies in OECD countries

“…The underlined politico-economic logic is that liberalizations are first carried out in sectors where the benefits clearly exceed the costs and then in sectors where the outcomes are more doubtful in terms of welfare (Høj et al 2006). 10 By way of example, the model of Blanchard and Giavazzi (2003) shows that labour market deregulation becomes more politically acceptable after product markets have been deregulated, which increases 8 According to standard econometric theory (Wooldridge, 2002), the module of the OLS coefficient is downwardly biased in the presence of measurement error. Therefore, if the effect of the variable affected by measurement error is negative, the OLS estimate is biased upward.…”

“…9 Notice that a good candidate instrument for liberalization used by a large literature cannot be used here: rightand left-wing politics have preferences on both REP and PMR, and the same is true for government ideology. 10 provides evidence on the existence of these spillovers between product market reforms, especially in sectors that were deregulated later, such as electricity. 12 In summary, the real effect of energy liberalizations on the market power of incumbents, which is the variable that affects REPs, depends on a country's willingness to embrace liberal policies and on the past success of less debatable liberalizations.…”

Energy Market Liberalization and Renewable Energy Policies in OECD Countries

“…9 Notice that a good candidate instrument for liberalization used by a large literature cannot be used here: rightand left-wing politics have preferences on both REP and PMR, and the same is true for government ideology. 10 (2006) provides evidence on the existence of these spillovers between product market reforms, especially in sectors that were deregulated later, such as electricity.…”

Review of periodical literature published in 2011

“…Such work is, of course, of particular use in placing the recent rise in top earnings in historical perspective. Long‐run issues are also the focus of a detailed study by Chick, examining the issues of risk, regulation, and responsibility in relation to the postwar nationalization and privatization of Britain's utility industries (with particular attention given to the electricity and water utilities). Postwar industrial energy consumption is discussed in Agnolucci and Venn's study of energy intensities across British industrial subsectors over the period 1970 to 2004.…”