Chapter 3: Administrative Costs of Reforming Utilities
Michael W. Bauer It might not mean more regulation, but more regulatory activity in order to come to a decision. (Civil servant, Oftel, November 2001) INTRODUCTION Recent reform of network utilities was largely promoted as boosting efficiency. There were basically two ways – more or less pronounced in public debate – for the privatisation and deregulation of state monopolies in the utilities to increase efficiency. First and foremost, the reforms were to lead to better organised markets, which would improve value for money and make goods and services cheaper for consumers (maximising economic efficiency). Secondly, unleashing the market forces and getting the state out of the business of business was also expected to reduce the public bill for sectoral governance, since the superior allocation capacity of the freed market would significantly reduce the need for public intervention (withering away the regulatory task) – or so the argument ran. This second part of the efficiency promise may have been somewhat more pronounced in the UK, but it was also an essential element of the political discourse of change (Wende) when the Christian-Democrats, under Helmut Kohl, came to power in the early 1980s. Has the reform in network utilities over the last ten years confirmed or disconfirmed the diminishing public burden proposition? And is it possible to come up with a systematic explanation of how and under which conditions sectoral administrative burdens, in the post-reform period, do materialise, migrate or cease to exist? As I will show for the network utilities in the United Kingdom...
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