Skip to main content

Please enter a keyword and click the arrow to search the site

Regulation and contracts for utility services: substitutes and complements

Subject

Economics

Publication Year

2003

Abstract

It is frequently asked that regulation by contract can effectively substitute for regaultion by a specialist regulatory agency for utility service industries. We examine these arguments and consider both legal aspects and the experience of the UK in the nineteenth and early tweentieth century. We consider in detail the UK's problems with reliance on franchise contracts in the railway and electricity industries and in other utility service industries. We conjecture that regulation and contracts are complements for network industries rather than substitutes. The existence of a regulatory agency allows for better and simpler contracts, which are easier to monitor, enforce and revise. This is what would be expected from the theory of incomlete contracts. We demonstrate that UK historical experience is strongly consistent with this view.

Publication Research Centre

Regulation Initiative (closed)

Series Number

54

Series

Regulation Initiative Working Paper Series

Available on ECCH

No


Select up to 4 programmes to compare

Select one more to compare
×
subscribe_image_desktop 5949B9BFE33243D782D1C7A17E3345D0

Sign up to receive our latest news and business thinking direct to your inbox

×

Sign up to receive our latest course information and business thinking

Leave your details above if you would like to receive emails containing the latest thought leadership, invitations to events and news about courses that could enhance your career. If you would prefer not to receive our emails, you can still access the case study by clicking the button below. You can opt-out of receiving our emails at any time by visiting: https://london.edu/my-profile-preferences or by unsubscribing through the link provided in our emails. View our Privacy Policy for more information on your rights.