Regulating Public Services

Regulation is one of the tools used by governments to control monopolistic behaviour in the provision of public services such as electricity, transport or water. Technological and financial innovations have changed these public services markets since the 1990s, bringing new regulatory challenges, including technological and financial ones. This book demonstrates that basic regulatory theory and tools can address these new challenges, in addition to more traditional regulatory issues, both in developed and developing economies. The theory covered in the book is robust enough to guide regulators in multiple contexts, including those resulting from the effects of financial or political constraints, evolving market structures or the need to adapt to institutional weaknesses, climate change and poverty concerns that demand regulatory intervention. A bridge between theory and an evolving global practice, this book mobilizes the lessons of the past to analyse the future of economic regulation.

'This superb book brings together – in a rigorous and pedagogical way – the academic knowledge and real-world challenges and solutions to the regulation of sectors that constitute an essential part of our economies. In our politically and socially uncertain times, it is particularly useful in thoroughly addressing the efficiency, equity and political acceptability of regulatory systems, as well as their fiscal and institutional constraints.' Mathias Dewatripont, Professor of Economics, Université Libre de Bruxelles and Honorary Vice-Governor, National Bank of Belgium, 'There are few books on utility regulation that are useful to practitioners and academics alike. This book is a much needed exception. It provides a thorough treatment of the conceptual and practical issues faced by regulators and policymakers, including the need to address institutional and political considerations with examples from developed and developing countries.' Andrés Gómez-Lobo, Professor of Economics, Department of Economics, Universidad de Chile, Minister of Transport and Telecomunications of Chile (2014-17), 'This extraordinary book should be read by everyone serious about the theory and practice of economic regulation. The authors present the main results from the economic theory of regulation clearly and connect them to a wide range of real issues. This unique breadth should enable graduate students and regulators alike to see what economic theory can and – so far at least – cannot contribute to resolving policy issues. Its lessons should make regulators more careful and economic theorists more willing to tackle important but difficult problems.' Richard Schmalensee, Emeritus at the Sloan School of Management and at the Department of Economics at the Massachusetts Institute of Technology (MIT), 'This is a powerful and timely book that examines topical industries of public interest, and how to control their power through the lenses of economic regulation, without forgetting institutional, legal, and political considerations. Offering perspectives through both the microscope and the telescope, the book constantly revolves around the three pillars of efficiency, equity, and financial sustainability. The authors are in the unique and authoritative position to write on the theory and practice of regulation based on their experience. A truly fascinating and engaging book that should be read not only by students and scholars interested in the regulation of industries, but also by every person who is concerned with the future of public services.' Tommaso Valletti, Head of the Department of Economics and Public Policy, Imperial College London, Chief Competition Economist, European Commission (2016-2019)

Emmanuelle Auriol is Professor of Economics at the Toulouse School of Economics. Throughout the years she has received several awards for her research on regulation, industrial organization and development economics. Claude Crampes is Professor Emeritus of Economics at the Toulouse School of Economics. He has worked as an advisor for energy utilities and regulators in Europe. Antonio Estache is Professor of Economics at the Université libre de Bruxelles and a member of the ECARES research center. Prior to that, he worked at the World Bank for twenty years, on public sector policies.