Infrastructure Regulation: What Works, Why, and How Do We Know?

INFRASTRUCTURE REGULATION: WHAT WORKS, WHY AND HOW DO WE KNOW?, E. Araral, D. Jarvis, M. Ramesh, R. Samarjiva, and W. Xun, eds., World Scientific Publishing, 2010

40 Pages Posted: 16 May 2010 Last revised: 23 May 2010

See all articles by Judith Clifton

Judith Clifton

University of Cantabria

Daniel Díaz-Fuentes

Universidad de Cantabria

Marcos Fernández-Gutiérrez

University of Cantabria

Julio Revuelta

University of Cantabria - Department of Economics

Date Written: January 11, 2010

Abstract

Public infrastructure services have been subject to dramatic regulatory reform since the 1980s in the European Union, particularly privatization, at the national level, and increased liberalization and deregulation, via the Single Market Programme. Despite this ambitious reform programme, there are signs that regulation is not always working. The Commission itself has recognised the limits of reform undertaken so far. Recently, it drew up a list of 23 sectors which were both crucial for economic growth and significantly “malfunctioning” in the Single Market. This list included major public infrastructure services - energy, gas, telecommunications and transportation. Work is ongoing to identify the causes of this “malfunctioning” and it is intended that new regulation will be implemented to improve this situation. As part of efforts to make these markets perform better, policy-makers are turning their attention to better understanding the consumer. Previously, regulation was usually based on that economic theory which assumed consumers were rational and selfish, but this is now being questioned using insights from Behavioural Economics. The Directorate General for Health and Consumers is moving towards a more eclectic approach to economics. In this light, this paper analyses regulatory reform of public infrastructure services from a user-consumer perspective. Stated (derived from Eurobarometer) and revealed (Household Budget Survey) preferences of consumers as regards public services are analyzed with a view to better understanding consumer behaviour. By contrasting stated and revealed preferences, new insight into consumer behaviour can be gained for use in the design of future regulation of infrastructure services in many countries world-wide. The new evidence generated can be used as a basis for the development of new consumer or user-related regulation.

Keywords: regulation, infrastructure, reform, consumer behaviour, satisfaction

JEL Classification: H4, L43, L5

Suggested Citation

Clifton, Judith and Diaz-Fuentes, Daniel and Fernández-Gutiérrez, Marcos and Revuelta, Julio, Infrastructure Regulation: What Works, Why, and How Do We Know? (January 11, 2010). INFRASTRUCTURE REGULATION: WHAT WORKS, WHY AND HOW DO WE KNOW?, E. Araral, D. Jarvis, M. Ramesh, R. Samarjiva, and W. Xun, eds., World Scientific Publishing, 2010, Available at SSRN: https://ssrn.com/abstract=1604451

Judith Clifton (Contact Author)

University of Cantabria ( email )

Avda. Los Castros, s/n
Santander 39005
Spain

Daniel Diaz-Fuentes

Universidad de Cantabria ( email )

Av. Los Castros s/n
Santander 39005, Cantabria 39005
Spain

HOME PAGE: http://personales.unican.es/diazd/

Marcos Fernández-Gutiérrez

University of Cantabria ( email )

Avda. Los Castros, s/n
Santander 39005
Spain

Julio Revuelta

University of Cantabria - Department of Economics ( email )

Av. Los Castros s/n
Santander 39005, Cantabria 39005
Spain

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