Table of Contents

Reforming the Postal Sector in the Face of Electronic Competition

Reforming the Postal Sector in the Face of Electronic Competition

Advances in Regulatory Economics series

Edited by Michael A. Crew and Paul R. Kleindorfer

In our increasingly technology-focused world, demand for traditional postal services is steadily shrinking. This timely volume examines the many challenges that the worldwide postal sector is facing as a result of growing electronic competition, and offers expert recommendations for reshaping postal structures to strengthen their competitiveness in an electronic age.

Chapter 20: Competition and the social cost of regulation in the postal sector

Martin Maegli and Christian Jaag

Subjects: economics and finance, public sector economics

Extract

Increased direct and indirect competition in the postal sector represents a great challenge to the traditional business model of postal operators. It is often put forward that regulatory institutions need to evolve in parallel and coherently with developments in the marketplace in order to allow postal operators to cope with these challenges. Crew and Kleindorfer (2008) note that finding an appropriate co-evolution of regulation and market development is one of the primary challenges of postal reform. Jaag and Trinkner (2011) argue that regulatory institutions are intended to remedy market failures and reduce transaction costs. However, they also cause governance costs, including costs resulting from distorted investment and innovation, if these institutions do not respond adequately to changes in consumer preferences and technologies.

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