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Competition in European Electricity Markets

Competition in European Electricity Markets

A Cross-country Comparison

Edited by Jean-Michael Glachant and Dominique Finon

This book focuses on the diversity of electricity reforms in Western Europe, drawing evidence from ten European Union memberstates plus Norway and Switzerland as associate members. The contributors analyse the various ways of introducing competition in the European electricity industries, and consider both the strategies of electricity companies and their behaviour in electricity marketplaces. They also offer an explanation of the differences of reforms by the institutions and the industrial structures of each country which shape the types of marketrules, industrial restructuring and public service regulations which have been adopted.

Chapter 6: The Nordic Public Ownership Model Under Transition to Market Economy: The Case of Electricity

Atle Midttun, Joar Handeland and Terje Omland

Subjects: economics and finance, competition policy, energy economics, industrial organisation


Atle Midttun, Joar Handeland and Terje Omland INTRODUCTION1 The Nordic/Scandinavian welfare state model has become well known as a middle path between hierarchic planned economic and laissez-faire market economy. Its supporters argue that the active, but pragmatic public engagement by the Nordic public authorities in the economy avoids the stiffness of the former East European planned economy models, while at the same time softening the harsh distributive outcomes of free-trade markets (Katzenstein, 1985; Mjøset, 1989; Nielsen and Pedersen, 1989). Given the pragmatic attitude of the Nordic public sector management, and its ability to pick up and implement managerial practices from private industry, it has been argued that Nordic public sector infrastructure firms are capable of maintaining a high level of productive and organizational efficiency. From a stakeholder perspective, it is even arguable that the pragmatic politicisation through the public ownership facilitates harmonious adaptation of the industry to its environment, which again supports a nonconflictual operation. Nevertheless, the model raises two major concerns: first, when the focus is shifted from static efficiency to dynamic, transformational and configurational efficiency one may question the competitive capability and the ability to stage efficient business strategies even from pragmatically oriented public infrastructure companies. Secondly, when the sector is opened up to international competition one may question the sustainability of the public sector model as a basis for business configuration under participation in the international market game. This chapter discusses some of the core issues facing the...

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