Privatisation and reregulation of network utilities

Completed

Not Energy Related
Other Power and Storage Technologies(Electricity transmission and distribution)
Other Cross-Cutting Technologies or Research(Environmental, social and economic impacts)

Basic and strategic applied research

SOCIAL SCIENCES (Economics and Econometrics)

Sociological economical and environmental impact of energy (Policy and regulation)
Sociological economical and environmental impact of energy (Other sociological economical and environmental impact of energy)

Professor DMG Newbery
Economics
University of Cambridge

Standard

ESRC

01 October 1989

30 September 1992

36 months

£90,456

No relevance to Underpinning Sectors

East of England

ESRC Electricity

Professor DMG Newbery, Economics, University of Cambridge

Objectives not supplied

Aims and methods (as at end of award): The aim is to undertake an integrated programme of research into the privatisation and re-regulation of the major network utilities, concentrating on BT and electricity. The main objective is to draw on and extend the theory of regulation and principal-agent models to handle dynamic issues such as investment, technical progress, and repeated regulatory review in order to compare the static and dynamic efficiency of alternative modes of ownership and regulation in the network industries. The aim here will be to develop a framework within which the costs and benefits of alternative forms of regulation and ownership can be systematically assessed. The second objective is to explore the role of auditing, accounting and other information systems as well as data revealed in share prices, in overcoming some of the important informational problems facing the principal in the conduct of the principal-agent relationship. The aim is to examine problems ofimplementing different forms of regulation. The final objective is to quantify the costs and benefits of the alternative forms of regulation identified by the theoretical study, using time series evidence, cross industry and country comparisons, and firm-specific data sources. The costs will include the deadweight costs on inefficient pricing, the costs of X-inefficiency (overmanning, investment delays, inappropriate investment and input choice, etc), and the costs of operating the regulatorysystem. This will require an assessment of how the utilities have responded to regulation.

26/10/11