PRIVATISATION AND LIBERALIZATION OF NETWORK UTILITIES

Privatisation of utilities is about ownership rather than control. Lib eralisation can induce greater improvements in performance than privat isation alone. Regulation is inevitably inefficient, and adequately co mpetitive network services may improve efficiency. History indicates t hat regulated vertical integration is durable so that liberalisation m ay be hard to sustain, Theory and evidence suggest that pricing networ k access and use is difficult, risking foreclosure without regulation. Progress in modelling competition over, for and between networks is r eported, The English electricity industry demonstrates the importance of entry conditions and contracts, and the gains from restructuring ar e estimated. (C) 1997 Elsevier Science B.V.