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 10: The US Postal Service

R. Richard Geddes

Subjects: economics and finance, institutional economics


R. Richard Geddes INTRODUCTION Can the US Postal Service be characterized as a firm that was deregulated and is now moving toward re-regulation? To what extent can shifts in US postal policy be understood as a quest for economic efficiency? What theories can help us interpret the evolution of US postal policy, and how are they affected by changing political circumstances? Can those theories also help us understand what is likely to happen next in US postal policy? The purpose of this chapter is to help address this set of important questions. The US Postal Service (USPS) operates within a unique, complex legal and political environment resulting from decades of institutional evolution. Postal policy has been liberalized, but the form of liberalization in the United States is unique. The USPS is clearly not an example of a firm that was deregulated and is now facing meaningful reregulation. Rather, its institutional evolution has been a slow, somewhat convoluted process of liberalization. That evolution is too nuanced, however, to be understood as a steady march toward economic efficiency. Rather, theories incorporating both efficiency and redistribution are necessary to understand US postal policy. In this chapter, I first provide an overview of the current structure of the USPS to give a flavor for the unusual organizational arrangements involved. I review the major reorganization efforts that have affected postal policy in the United States. One salient aspect of postal organization is the degree of contracting out of mail preparation, known as worksharing. This overview...

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