Infrastructure regulation and investment for the long-term—an introduction

✍ Scribed by Christian von Hirschhausen; Thorsten Beckers; Andreas Brenck

• Book ID: 104035432
• Publisher: Elsevier Science
• Year: 2004
• Tongue: English
• Weight: 133 KB
• Volume: 12
• Category: Article
• ISSN: 0957-1787
• DOI: 10.1016/j.jup.2004.09.002

✦ Synopsis

This paper discusses a series of issues regarding infrastructure regulation and investment for the long-term. These issues have gained attention recently following a series of blackouts in the electricity sector and accidents in other infrastructure sectors, leading to a general perception that privatization and deregulation of network industries has thus far favored short-term objectives and neglected dynamic aspects and investment. We argue that the real issue at stake is not investment in and of itself, but the appropriate regulatory framework, which should balance various objectives, including investment. The approaches are specific to each sector and each structural constellation. We give an overview of the issue by discussing several ideal type organizational structures (state ownership, regulated and unregulated private ownership). We then address four cross-sectional topics: (i) regulatory approaches, (ii) vertical structures and contractual relations, (iii) quality, and (iv) over-vs. underinvestment. We discuss several applications, including those provided by the other papers in this special issue of Utilities Policy.