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Competitive mode and utilities sector regulatory reform

Author: WangZhiFang
Tutor: YuLiangChun
School: Shandong University
Course: National Economics
Keywords: public utility incentive regulation competition mode
CLC: F294.1
Type: Master's thesis
Year: 2006
Downloads: 179
Quote: 2
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The public utility departments are foundations of realizing continual, fast and healthy development of national economy, the field involved by it mainly includes industries such as power supplying , water supplying , water draining off, sewage disposal , heating supply , railway transportation etc., all basic departments of the national economy and the people’s livelihood of relations. The industry in the field of public utilities all have a characteristic of infrastructure industry, have natural monopoly of a certain degree, the majority is monopolized by the country. With the quickening of economic development and urbanization process, because of the necessities characteristic of products and service of public utilities department, these department will become other industry’s decisions key to the benign development, it is a decisive factor whether people’s living standard could be improved. But the realistic state is because of history, political, economic reasons,that public utilities department has become the "bottle-neck" of economic development for its poor efficiency and supply insufficiency more and more.Perfect competition is the optimum structure of market. In a competitive environment, the law of selecting the superior and eliminating the inferior will force enterprises to try every means to reduce the production cost, improve production efficiency. The facilitation to economic efficiency of the competition is suitable for public utilities too. Breaking the monopoly structure, introducing the competition , setting up a relatively fair and effective competitive structure, will improve the efficiency of the public utilities department. At the same time, by the look of relation of property right and competition, the two are interdependent.The latent energy of competition’s releasing depends on high-efficient reasonable property relations arrangement. But the public utilities department has their own economic characteristics. Because of the economies of scale and scope, they have the characteristic of natural monopoly in various degree. Facing a difficult choice of the vigor of competition and economies of scale, the focal problem is whether and how to loosen government regulation and introduce competition into pubic utility.

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CLC: > Economic > Economic planning and management > Urban and municipal economy > Infrastructure,utilities, construction and management > Utilities
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