Advances in Regulatory Economics series
Edited by Michael A. Crew, Paul R. Kleindofer and James I. Campbell Jr
Chapter 17: Liberalization and Market Performance: Towards Higher Efficiency in Sweden
17. Liberalization and market performance: towards higher eﬃciency in Sweden* Peter Andersson† 1. INTRODUCTION Sweden was the ﬁrst country in the world to truly liberalize its postal market. The statutory monopoly given to the state Post Oﬃce in 1888 was removed on 1 January 1993. In 1994, the Post Oﬃce was turned into a public company, Sweden Post (Posten AB), completely owned by the state. A new Postal Act and a Postal Ordinance replaced the old monopoly proclamation and the Post and Telecom Agency, the new regulatory authority, was established. The government signed a contract with Sweden Post which included the provision of universal services without any support from the state. Thus, Sweden represents an interesting benchmark for postal liberalization as the reforms took place 15 years before those in most other European Union (EU) countries. Why did Sweden’s reform precede that of other EU countries? What were the objectives of liberalization and have they been fulﬁlled? How did Sweden Post respond and to what extent has it been challenged by entrants? What has happened to the performance of the market: prices, productivity, quality, innovation and eﬃciency? What has happened to universal services? Can we learn anything from the Swedish experience about the design of the regulatory framework for a modern, competitive postal market? Section 2 will give the background to the reforms in 1993–94 and an explanation why reform occurred in Sweden long before it did in other countries. Section 3 presents the...