Maegli, Martin and Jaag, Christian (2009): Regulatory Governance Costs in Network Industries: Implicatins for postal Regulation.
Download (141Kb) | Preview
The various actors in regulated industries relate to each other within a broader institutional framework, i.e. by way of formal and informal rules. An important role in the implementation of liberalization processes is given to the regulation and thus to regulatory institutions. Regulation should have positive effect on social welfare. But state intervention also causes costs which we call costs of regulatory governance. These costs result from negative consequences caused by unnecessary regulatory requirements or from the implementation of inappropriate regulatory instruments. According to new institutional economics, these costs will depend upon the formal and informal rules among the involved actors, upon the allocation of property rights among these actors, as well as upon the various principal-agent or more generally contractual relationships among these actors. In this article we define an analytical framework of costs of regulatory governance. We distinguish between direct and indirect costs of regulation: Direct costs occur in relation with the institutional design of the regulatory framework and the behavior of actors. Whereas the indirect costs arise because of false incentives and finally turn out in an inefficient supply of goods and services. Using the example of the Swiss postal market we give an outline of a possible application of the framework.
|Item Type:||MPRA Paper|
|Original Title:||Regulatory Governance Costs in Network Industries: Implicatins for postal Regulation|
|Keywords:||Regulation; Postal Sector; Regulatory Governance Costs; New Institutional Economics|
|Subjects:||D - Microeconomics > D2 - Production and Organizations > D23 - Organizational Behavior; Transaction Costs; Property Rights
L - Industrial Organization > L5 - Regulation and Industrial Policy > L51 - Economics of Regulation
L - Industrial Organization > L8 - Industry Studies: Services > L87 - Postal and Delivery Services
K - Law and Economics > K2 - Regulation and Business Law > K23 - Regulated Industries and Administrative Law
D - Microeconomics > D6 - Welfare Economics > D61 - Allocative Efficiency; Cost-Benefit Analysis
|Depositing User:||Martin maegli|
|Date Deposited:||21. May 2009 13:46|
|Last Modified:||15. Feb 2013 23:11|
BAUER, M. W. (2005) "Administrative Costs of Reforming Utilities", In D. Coen and A. Héritier (eds), Refining Regulatory Regimes: Utilities in Europe. Cheltham et al: Edward Elgar Publishing.
BERGMAN, L., DOYLE, C., et al. (1998) Europe's Network Industries: Conflicting Priorities - Telecommunications: Monitoring European Deregulation. London: Centre for Economic Policy Research.
BÖLLHOFF, D. (2005) "Developments in Regulatory Regimes: Comparison of Telecommunications, Energy and Rail", In D. Coen and A. Héritier (eds), Refining Regulatory Regimes: Utilities in Europe. Cheltham et al: Edward Elgar Publishing.
BONARDI, J.-P., HOLBURN, G. L. F., et al. (2006) "Nonmarket Strategy Performance: Evidence from U.S. Electric Utilities", Academy of Management Journal, 49 (6): 1209-1228.
COEN, D. (2005) "Business-Regulatory Relations: Learning to Play Regulatory Games in European Utility Markets", Governance, 18 (3): 375-398.
CREW, M. A. and KLEINDORFER, P. R. (2000) "Liberalization and the Universal Service for Posts", In M. A. Crew and P. R. Kleindorfer (eds), Current Directions in Postal Reform. Bosten et al.: Kluwer Academic Publishers. pp. 3-28.
CREW, M. A. and KLEINDORFER, P. R. (2006) "Regulation, Pricing and Social Welfare", In M. A. Crew and D. Parker (eds), International Handbook of Economic Regulation. Cheltham et al: Edward Elgar Publishing. pp. 63-81. CROZIER, M. (1964) The Bureaucratic Phenomenon. Chicago: University of Chicago Press.
DEN BUTTER, F., DE GRAF, M., et al. (2009) The Transaction Costs Perspective on Costs and Benefits of Governmet Regulation: Extending the Standard Cost Model. Tinbergen Institute Discussion Papaer TI 2009-013/3. Amsterdam: University of Amsterdam, Faculty of Economics and Business Administration
ECORYS (2005) Development of competition in the European postal sector. Study for DG Internal Market and Services, European Comission.
ECORYS (2008) Main Developments in the postal Sector (2006-2008). Study for DG Internal Markets and Services, European Comission.
ELSENBAST, W. (1999) Universaldienst unter Wettbewerb. Baden-Baden: Nomos.
ESTACHE, A. and MARTIMORT, D. (1999) Politics, Transaction Costs, and the Design of Regulatory Institutions. World Bank Policy Research Working Paper No. 2073. EUROPEAN COMISSION (2008) "3rd Postal Directive (2008/06/EC)".
FINGER, M. (2006) De- und Re-Regulierung der Netzwerkindustrien: Wohin geht die Reise? Lausanne: CDM Working Paper Series.
JAAG, C. (2007) "Liberalization of the Swiss Letter Market and the Viability of Universal Service Obligations", Swiss Journal of Economics and Statistics, 143 (3): 261-282.
JAAG, C. and TRINKNER, U. (2008) "Pricing in Competitive Two-Sided Mail Markets", In M. A. Crew and P. R.
Kleindorfer (eds), Competition and Regulation in the Postal and Delivery Sector. Cheltham et al: Edward Elgar Publishing.
KNIEPS, G. (1997) "Ansätze für eine "schlanke" Regulierungsbehörde für Post und Telekommunikation in Deutschland", Ordo, 48: 253-268.
KNIEPS, G. (2002) "Does the System of Letter Conveyance Constitute a Bottleneck Resource?" In G. Kuhlenkampf and A. Niederprüm (eds), Contestability and Barriers to Entry in Postal Markets. Rheinbreitback: WIK. pp. 9-22.
KNIEPS, G. (2005) Wettbewerbsökonomie - Regulierungstheorie, Industrieökonomie, Wettbewerbspolitik. Berlin et al.: Springer.
KNIEPS, G. (2007) Netzökonomie. Wiesbaden: Gabler. KNIEPS, G. and WEISS, H. J. (2008) Regulatory Agencies and Regulatory Risk. Discussion Paper No.118 Freiburg: Universität Freiburg, Institut für Verkehrswissenschaft und Regionalpolitik.
MUELLER, D. C. (2003) Public Choice III. Cambridge: Cambridge University Press.
NERA (2004) Economics of Postal Services. Report for DG Internal Market and Services, European Commission. OECD (2006) "OECD Reviews of Regulatory Reform - Switzerland: Seizing the Opportunities for Growth ", OECD Governance, 2006 (7): 1-188.
OXERA (2004) Costs and Benefits of Market Regulators. Study for the Dutch Ministry of Economic Affairs.
OXERA (2006) Funding Universal Service Obligations in the Postal Sector. Report prepared for La Poste, De Post-La Poste, Hellenic Post, Poste Italiane, P&T Luxembourg, Correos, Magyar Posta, Cyprus Post, Poczta Polska.
PANZAR, J. C. (2008) "Interactions Between Regulatory and Antitrust Policies in a Liberalized Postal Sector", In M. A. Crew, P. R. Kleindorfer and J. I. Campell (eds), Handbook of Worldwide Postal Reform. Cheltham et al: Edward Elgar Publishing.
PANZAR, J. C. and WILLIG, R. D. (1977) "Free Entry and the Sustainability of Natural Monopoly", The Bell Journal of Economics, 8 (1): 1-22.
PLAUT ECONOMICS (2007) Opening Postal Markets in Switzerland. Report for the Federal Departemt of Economic Affairs.
POSNER, R. A. (1974) "Theories of Economic Regulation", The Bell Journal of Economics and Management Science, 5 (2): 335-358.
POSTREG (2008) "Stellungnahme zum Postgesetzentwurf im Rahmen der Vernehmlassung" (accessed on 14.12.). SCHARPF, F. W. (1997) Games Real Actors Play: Actor-Centered Institutionalism in Policy Research. Boulder: Westview Press.
SIDAK, J. G. and SPULBER, D. F. (1998) "Deregulation and Managed Competition in Network Industries", Yale Journal on Regulation, 15 (1): 117-147.
VANTOMME, J. and FRATINI, A. (2008) "Licensing Regimes in the Postal Sector: The Impact of the Recent EC Proposal for a Third Postal Directive", In M. A. Crew and P. R. Kleindorfer (eds), Competition and regulation in the Postal and Delivery Sector. Cheltham et al: Edward Elgar Publishing.
WAETHERBY, J. L. (1971) "A Note on Administrative Behavior and Public Choice", Public Choice (11): 107-110.
WIK-CONSULT (2005) Evaluation des Schweizer Postmarktes. Study for the Swiss Postal Regulator PostReg.
WIK-CONSULT (2006) Main Developments in the Postal Sector (2004-2006). Study for DG Internal Market and Services, European Commission.
WILKS, S. and BARTLE, I. (2002) "The Unanticipated Consequences of Creating Independent Competition Agencies", West European Politics, 25 (1): 148 - 172.