Privatization, Public Ownership and the Regulation of Natural Monopoly Book

	Acknowledgements
	Introduction: The Scope of the Book	1
Pt. I	Historical Development	15
1	Regulation by Parliament	17
1.1	The railways as a natural monopoly	17
1.2	Parliament as railway regulator: its general unsuitability	20
1.3	Monopoly policy: Gladstone's Regulation of the Railways Act, 1844	21
1.4	Reasons for the failure of Gladstone's monopoly policy	28
1.5	Reconsideration of the 1844 Act: the Devonshire Commission, 1865-1867	33
2	Regulation by Commission	44
2.1	Regulatory failure: the failure of a legalistic approach to tariff control	44
2.2	Social obligations on the railways	52
2.3	Towards railway nationalization	55
2.4	The other natural monopolies and competition policy: regulation by local government	61
3	The Failure of Public Enterprise	70
3.1	The background to nationalization	70
3.2	The form of nationalization	76
3.3	The attempts to define criteria and set objectives	79
3.4	Improving performance	86
3.5	The 1970s	88
3.6	A fundamental attack on public enterprise	92
4	Privatization	102
4.1	An implausible political explanation of privatization	102
4.2	The pragmatic origins of privatization	107
4.3	An economic explanation of the origins of privatization	112
4.4	The competitive privatizations	116
4.5	The privatization of natural monopolies	123
Pt. 2	Policy Issues	143
5	The Extension of Competition	145
5.1	Break-up and economies of scale	146
5.2	The culture of public-sector industry	152
5.3	Some pseudo-regulatory offences and unnatural monopoly, a key economic regulatory offence	157
5.4	Free entry: contestability and predation	158
5.5	Competition through interconnection	167
5.6	Break-up and yardstick competition	177
6	The Economic Regulation of Monopoly	186
6.1	The American experience of rate-of-return regulation	187
6.2	Why regulate natural monopoly?	197
6.3	RPI-X	205
6.4	The revising of X	212
7	The Uses of Information	226
7.1	Regulation through publicity: American experience	227
7.2	Sunshine regulation in Britain	230
7.3	The preconditions of adequate information: alignment of objectives	235
7.4	The preconditions of adequate information: objectives	243
7.5	Adequate information for regulation	250
8	The Limits to the Regulator's Independence	258
8.1	American legalism	259
8.2	The accountability of the regulator	267
8.3	Procedural constraints	272
8.4	Appeals on matters of substance	281
9	The Dangers of Mixing Social with Economic Regulation	291
9.1	Non-market pricing policies	292
9.2	Social obligations and the unsustainability of natural monopoly	301
9.3	Quality	304
9.4	Reflecting the consumer's interest	307
9.5	Divergences between social and private interests	310
9.6	The social regulator and political accountability	316
Pt. 3	Conclusions	333
10	Does Ownership Matter?	335
10.1	The external prerequisites of efficient public enterprise	335
10.2	The internal prerequisites of efficient public enterprise	345
10.3	Public enterprise reform or privatization?	350
10.4	Privatization versus public enterprise: overseas	355
10.5	Public enterprise and privatization where economic efficiency is not the overriding objective	362
11	Can the Regulator's Independence be Preserved?	368
11.1	The purpose of regulation: the Chicago theory	369
11.2	How and why American deregulation occurred	373
11.3	Regulatory capture: the Virginian theory	384
11.4	Is an independent regulator possible?	388
11.5	Reinforcing regulatory independence in Britain	395
12	Privatization, Monopoly and the Design of Regulatory Systems	406
12.1	Monopoly: nationalization and privatization	406
12.2	The case for regulation	410
12.3	Regulatory failure	410
12.4	Avoiding regulatory capture	412
12.5	An effective regulatory system	417
12.6	Conclusion: the new British regulatory system. Lessons for elsewhere	419
	References	421
	Index	437