Table of Contents

Regulation, Deregulation, Reregulation

Regulation, Deregulation, Reregulation

Institutional Perspectives

Advances in New Institutional Analysis series

Edited by Claude Ménard and Michel Ghertman

Building on Oliver Williamson’s original analysis, the contributors introduce new ideas, different perspectives and provide tools for better understanding changes in the approach to regulation, the reform of public utilities, and the complex problems of governance. They draw largely upon a transaction cost approach, highlighting the challenges faced by major economic sectors and identifying critical flaws in prevailing views on regulation. Deeply rooted in sector analysis, the book conveys a central message of new institutional economics: that theory should be continuously confronted by facts, and reformed or revolutionized accordingly.

Chapter 8: Deregulation, Efficiency and Environmental Performance: Evidence from the Electric Utility Industry

Magali A. Delmas, Michael V. Russo, Maria J. Montes-Sancho and Yesim Tokat

Subjects: economics and finance, institutional economics


Magali A. Delmas, Michael V. Russo, Maria J. Montes-Sancho and Yesim Tokat INTRODUCTION Academics writing from the perspectives of economics, strategic management, and organization theory have devoted decades of research to how economic regulation and deregulation has impacted the behavior of firms. One stream of this literature focuses on how deregulation changes the scope of permissible activities and the economic incentives for incumbents and new entrants (for example, Bonardi, 2004; Fuentelsaz et al., 2002; Haveman, 1993; Haveman et al., 2001; Miller and Chen, 1994; Smith and Grimm, 1987). The second set of studies focuses on the impact of deregulation on economic performance (Berger and Mester, 2003; Corsi et al., 1991; Grabosky et al., 1994; Hao et al., 2001, 2003; Isik and Hassan, 2003; Kankana et al., 2001; Sturm and Williams, 2004; Tortosa-Ausina, 2002). The third set of studies analyzes the impact of deregulation on other attributes such as the quality of service or safety (Alexander, 1992; Auriol, 1998; Barnett and Higgins, 1989; Rhoades et al., 2005; Rose, 1992; Tsuchiya, 2005). The focus of many of these studies on a single indicator of performance fails to achieve comparative evaluation along several dimensions. But because deregulation involves economic, social and environmental dimensions, and because it is possible that there are trade-offs between these different dimensions of deregulation, studies need to use multiple indicators. Furthermore, work to date has not expanded our knowledge about the ability of deregulation to affect the provision of public goods. Previous work has shown how private benefits accrue...

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