Successes and Failures in Regulating and Deregulating Utilities

Successes and Failures in Regulating and Deregulating Utilities

Evidence from the UK, Europe and the USA

Edited by Colin Robinson

This book is the latest annual review of utility regulation and deregulation, published in association with the Institute of Economic Affairs and the London Business School

Chapter 7: Measuring the success of postal regulators: best practice in postal regulation

Ian Senior

Subjects: economics and finance, competition policy, public finance, public sector economics


Ian Senior INTRODUCTION1 In 1970, I wrote a paper,2 published by the Institute of Economic Affairs, arguing that the letter monopoly in the UK should be abolished. My conclusions received support from The Economist, but elsewhere encountered a resounding silence. When I developed the arguments in a further paper in 1983,3 also published by the IEA, and suggested privatizing the Post Office, I was taken out to lunch by the Post Officeʼs public relations department, which represented progress of some sort. Since 1970, I have developed my ideas in various publications and talks, but my starting point remains that competition is desirable in supplying postal services in general and letter services in particular. This is the first time I have specifically addressed the question of whether and how postal regulation should be used to bring a fully competitive postal market into being in the UK and beyond. 1 BACKGROUND In the 1980s and 1990s, Mrs Thatcherʼs administration embarked on a major programme of privatization, a word that had not been coined in 1970. Not only were organizations such as British Airways that clearly operated in a competitive market privatized, others such as water, gas and electricity were included even though the possibilities for the creation of competing physical structures were, and are, far less promising. Postal services, embodied in what then was called the Post Office, remained curiously absent from Mrs Thatcherʼs shopping list. Only when John Major became prime minister did the privatization of...

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