Core References

• Understanding Regulation: Theory, Strategy, and Practice New York: Oxford University Press, 1999, Chapters 4 and 16. Baldwin, Robert, and Martin Cave

  Describes basic regulatory strategies, such as command and control, self-regulation, incentive regulation, and competition. Examines basic approaches that regulators use to facilitate competition.

• Competition in Network Industries – Where and How to Introduce It. Note no. 104 in Public Policy for the Private Sector. Washington, D.C.: World Bank Group, 1997. Klein, Michael, and Philip Gray

  Explains concepts of competition for the market, competition over existing networks, and competition among networks with practical examples. Describes various options for using competition in these sectors, including franchising, open access, pooling, and timetabling. Explains that how network competition is introduced and how effectively and easily it is implemented will vary from one network industry to another. General rules for deciding where and how to introduce competition are discussed.

• Back to the Future: The Potential in Infrastructure Privatization Note no. 30 in Public Policy for the Private Sector. Washington, D.C.: World Bank Group, 1994. Klein, Michael, and Neil Roger

  Describes problems of monopoly provision of utility services. Explains that competition can overcome some of the institutional weaknesses that limit the effectiveness of regulation.

Sectoral References

ELECTRICITY

• Making Competition Work in Electricity New York: Wiley & Sons, 2002, Chapters 1-2. Hunt, Sally

  Argues that competition is more effective than regulated monopoly for efficiently providing services. Competition assigns risks to shareholders while regulated monopoly assigns risks to customers. Technical complexity of electricity industry needs to be understood before adopting reforms.

TELECOMMUNICATIONS

• What the Transformation of Telecom Markets Means for Regulation Note no. 121 in Public Policy for the Private Sector. Washington, D.C.: World Bank Group, 1997. Smith, Peter

  States that it is also becoming increasingly difficult to regulate telecommunications services separately due to increased substitutability of goods across sectors and a convergence within industries. Governments are finding it beneficial to use competition rather than regulation of conduct to improve sector performance.

TRANSPORTATION

• Liberalization of the Philippine international air transport industry: que pasó? Competition policy is an essential factor for successful liberalization of the airline industry in Philippines Paper provided by Philippine Institute for Development Studies (PIDS), Philippines , 2001. Austria, M.S.

  Analyzes the liberalization and deregulation policy for the international air transport industry in the Philippines. Examines the effects of these policies on competition and market structure, and identifies areas where reforms are needed. Emphasizes the importance of the policy and recommends that competition policy should focus on, among others: (1) market access; (2) access to inputs; and (3) mergers and acquisitions.

Key Words

Competition, Cross-subsidization, Privatization, Regulation