Evaluating EU policies on public services: a citizens´ perspective

This article evaluates EU policies on public services – particularly public network services - from the citizens´ point of view. It is first argued that citizens´ perceptions about these services are important because they are essential for quality of life, but also because they exhibit economic characteristics such as asymmetrical information, adverse selection and positive externalities. Changing EU policy on public services is synthesised and classified into two main phases in section two. Citizen satisfaction with public services as revealed through surveys from 1997 to 2007 is explored in the third section. In the discussion, the prospects for EU policy on public services are considered and, it is argued that, from the perspectives of subsidiarity and proportionality, policy towards strengthening the common market is being increasingly uploaded to the supranational level in the form of directives, whilst cohesion and redistribution policies are being downloaded to the national level or dealt with at the supranational level by “soft” instruments.Economics of public services; evaluation; citizen; consumer; satisfaction; privatization; liberalization; competition

Explaining Telecoms and Electricity Internationalization in the European Union: A Political Economy Perspective

One consequence of the liberalization of certain services in the European Union was that a number of formerly inward-looking incumbents in telecommunications and electricity rapidly transformed themselves into some of the world’s leading Multinationals. However, the precise relationship between liberalization and incumbent internationalization is contested. This article tests three persuasive arguments derived from the political economy literature on this relationship. The first claims that those incumbents most exposed to domestic liberalization would internationalise most. The second asserts the opposite: incumbents operating where liberalization was restricted could exploit monopolistic rents to finance their aggressive internationalisation. The third argument claims that a diversity of paths will be adopted by countries and incumbents vis-à-vis liberalization and internationalization. Using correlation and cluster analysis of the sample of all major EU telecoms and electricity incumbent Multinationals evidence is found in favour of the third hypothesis. Internationalization as a response to liberalization took diverse forms in terms of timing and extent and this is best explained using a country, sector and firm logic.Electricity, European Union, Internationalization, Liberalization, Telecommunications, Political Economy, Multinational Corporations, National Champions

The European Union, southern multinationals and the question of the 'strategic industries'

This paper analyzes how the European Union has responded to Inward Foreign Direct Investment from Emerging Markets, particularly in the so-called Strategic Industries. Attention is focused on two sectors which have long been considered strategic assets by most countries around the world for decades: energy and telecommunications. In order to understand the dynamics of the EU's international investment climate, particularly from the perspective of emerging markets, the paper contains three main levels of analysis. Firstly, the changing international context, in particular, the extent to which IFDI from emerging markets has challenged the status quo of the traditional investment climate, as well as the unfolding financial crisis and economic recession. Secondly, the European authorities, principally the European Commission (EC), as the main institution responsible for forging the European Single Market and ensuring the “four freedoms,” (goods, services, capital, and people). Thirdly, individual member state behavior, since it lies with national governments to establish FDI policy, and satisfy domestic political economy and welfare demands. It concludes that, when analysed comparatively, the EU is still one of the world's most open regimes to IFDI and, though there is some evidence of protectionism vis-a-vis IFDI from emerging markets, there is also evidence of protectionism among member state economies themselves

Evaluating EU policies on public services: a citizens´ perspective

This article evaluates EU policies on public services – particularly public network services - from the citizens´ point of view. It is first argued that citizens´ perceptions about these services are important because they are essential for quality of life, but also because they exhibit economic characteristics such as asymmetrical information, adverse selection and positive externalities. Changing EU policy on public services is synthesised and classified into two main phases in section two. Citizen satisfaction with public services as revealed through surveys from 1997 to 2007 is explored in the third section. In the discussion, the prospects for EU policy on public services are considered and, it is argued that, from the perspectives of subsidiarity and proportionality, policy towards strengthening the common market is being increasingly uploaded to the supranational level in the form of directives, whilst cohesion and redistribution policies are being downloaded to the national level or dealt with at the supranational level by “soft” instruments

Is Market-Oriented Reform Producing a “Two-Track” Europe? Evidence from Electricity and Telecommunications

The European Commission has formally recognised that adequate provision of basic household services, including energy, communications, water and transport, is key to ensuring equity, social cohesion and solidarity. Yet little research has been done on the impact of the reform of these services in this regard. This article offers an innovative way to explore such questions by analysing and contrasting stated and revealed preferences on citizen satisfaction with and expenditure on two services, electricity and telecommunications, in two large countries, Spain and the United Kingdom. In telecommunications, but to a much lesser extent in electricity, we find evidence that reform has led to a “two-track” Europe, where citizens who are elderly, not working or the less-educated behave differently in the market, with the result that they are less satisfied with these services than their younger, working, better-educated, counterparts

Is Market-Oriented Reform Producing a “Two-Track” Europe? Evidence from Electricity and Telecommunications

The European Commission has formally recognised that adequate provision of basic household services, including energy, communications, water and transport, is key to ensuring equity, social cohesion and solidarity. Yet little research has been done on the impact of the reform of these services in this regard. This article offers an innovative way to explore such questions by analysing and contrasting stated and revealed preferences on citizen satisfaction with and expenditure on two services, electricity and telecommunications, in two large countries, Spain and the United Kingdom. In telecommunications, but to a much lesser extent in electricity, we find evidence that reform has led to a “two-track” Europe, where citizens who are elderly, not working or the less-educated behave differently in the market, with the result that they are less satisfied with these services than their younger, working, better-educated, counterparts.Public Service, Electricity, Telecommunications, Revealed preferences, Consumer Behaviour, Vulnerable Consumers. European Union. Regulation

Bringing Citizens Back In: Renewing Public Service Regulation

This essay concerns the ways in which public services – particularly household services such as communications, energy, water and transportation – have been regulated and deregulated, and analyses what consequences this has for users and citizens. Much of the deregulation of public services from the 1980s – liberalization, privatization and New Public Management – was justified by claims that reform would provide users with more choice, whilst they would receive cheaper and better quality services. Little account was taken of the fact that users are highly heterogeneous, that socio-economic differences might be important in determining their consumption of public services, and that this may not lead to socially optimum outcomes. By examining consumption patterns in two large European countries, Spain and the UK, through an analysis of revealed and declared preferences, this paper sheds light on how socio-economic differences among households help determine public service consumption. The main findings are that the supposed benefits of public service deregulation are not evenly spread across populations, and that specifically targeted “bottom-up” regulation from the demand-side could usefully address these issues, thus improving social welfare.Regulation, Privatization, Public Services, Telecommunications, Electricity, Gas and water

Improving Regulation of Public Infrastructure Services : from the Consumer Perspective: Insights from Behavioural Economics.

Due to the intense market-oriented reform introduced during the last decades, particularly in the EU context, public infrastructure services have experienced deep recent changes in their modes of organisation and regulation. A key aim of market-oriented reforms was to introduce competition and further opportunities for choice, which was expected to increase citizens’ satisfaction in their role as consumers. Nevertheless, the regulation of these markets after the reforms has proven to be more complex than first thought, whilst significant problems from the perspective of consumers have been detected. In this light, international organizations and regulators and policy makers are paying increasing attention to the new insights on consumer behaviour derived from Behavioural Economics. Regulators and policy makers are considering how a deeper understanding of consumers’ behaviour may be translated into specific regulatory policies from the consumer perspective, as a complement to the more traditional competition policies, aiming to improve consumers’ well-being and satisfaction. In this context, a crucial concern is whether, due to the increasing complexity of the markets, certain groups of consumers (the so-called “vulnerable consumers”) may be at a disadvantaged position for taking satisfactory consumption decisions in the market place. However, further empirical evidence is required on the relation between consumers’ socioeconomic characteristics, behaviour and satisfaction, aiming at establishing which kind of regulatory policies may be applied and, in case, in which markets and socioeconomic dimensions they should focus. The objective of this paper is to analyse the differences in consumers’ decisions and attitudes in the markets of public infrastructure services, focusing on three socio-economic dimensions representative of potential vulnerability: education, age and employment. To this aim, this paper contrasts information on citizens’ revealed preferences (expenditure decisions), obtained from national Household Budget Surveys, and stated preferences (satisfaction with price), obtained from the last Eurobarometer on Services of General Interest. The paper focuses on two essential services (electricity and telecommunications) and on three different large European countries (Italy, Spain and the UK) where comparable information is available. The results obtained show that, for some of the services and socioeconomic dimensions under analysis, potentially vulnerable consumers exhibit particular difficulties for satisfactory decision making, reflected in lower satisfaction associated to different expenditure decisions. However, the characteristics of the service and other contextual factors also demonstrate to play a significant role for explaining the distinctive features observed. Insights from Behavioural economics provide a useful base for interpreting these results. The empirical evidence obtained from this paper, combined with a Behavioural economics approach, permits to obtain some clear recommendations for improving results of regulation from the point of view of consumer satisfaction, by focusing on incorporating citizens’ heterogeneity as consumer

Inward FDI in Spain and its policy context

Inward foreign direct investment (IFDI) into Spain boomed during most of the 2000s, with IFDI stock quadrupling from US$156 billion at the end of 2000 to a record high US$ 604 billion by the end of 2010. The bulk of this investment originates in Europe: it represented over three quarters of the total in 2003, reaching 85% by 2009. In recent years, Spain has started to receive increasing investment flows from Latin America and the Gulf Arab countries, in addition to investment from other emerging markets, particularly China. Leading industries attracting inward FDI have traditionally included automobile and retail businesses, while the sale of former monopolies, such as the utilities, and Spain's emerging move toward world leadership in renewable energies are providing fresh impetus for investment. Despite a slow-down in 2009 as a consequence of the global financial and economic crises, Spain has been successful in retaining its FDI stock over the decade 2000-2010, which augurs well for its future performance. Although FDI inflows fell noticeably in 2009, FDI inflows in 2010 confirm that a substantial recovery has been achieved