What happened to efficiency in electricity industries after reforms?

The last two decades have witnessed widespread power market reforms in both developed and developing countries that have cost billions of dollars. Among the key aims (and assumptions) of these reforms, there has always been realization of improvements in power sector efficiency. This paper questions the validity of this hypothesis. Using panel data from 92 countries covering the period 1982–2008, empirical models are developed and analyzed. The research findings suggest that the impact of the reforms on electricity industry performance is statistically significant but also limited. The results imply that, after controlling for country-specific variables, application of liberal market models in electricity industries slightly increases efficiency in power sector. Besides, we detect a positive relationship between reform process and the percentage share of network (transmission and distribution) losses in total electricity supplied; meaning that as countries take more reform steps the network losses as a fraction of power generated tend to increase. Moreover, the study puts forward that income level and other country specific features are more important determinants of industry efficiency than the reform process. Overall, contrary to expectations of substantial increases in sector efficiency, the paper concludes that introducing a decentralized market model with competition in the electricity sector has a limited increasing effect on power industry performance

What happened to efficiency in electricity industries after reforms?

The last two decades have witnessed widespread power market reforms in both developed and developing countries that have cost billions of dollars. Among the key aims (and assumptions) of these reforms, there has always been realization of improvements in power sector efficiency. This paper questions the validity of this hypothesis. Using panel data from 92 countries covering the period 1982–2008, empirical models are developed and analyzed. The research findings suggest that the impact of the reforms on electricity industry performance is statistically significant but also limited. The results imply that, after controlling for country-specific variables, application of liberal market models in electricity industries slightly increases efficiency in power sector. Besides, we detect a positive relationship between reform process and the percentage share of network (transmission and distribution) losses in total electricity supplied; meaning that as countries take more reform steps the network losses as a fraction of power generated tend to increase. Moreover, the study puts forward that income level and other country specific features are more important determinants of industry efficiency than the reform process. Overall, contrary to expectations of substantial increases in sector efficiency, the paper concludes that introducing a decentralized market model with competition in the electricity sector has a limited increasing effect on power industry performance.Models with panel data (C33); model construction and estimation (C51); electric utilities (L94); power market reform; electricity industry efficiency

Regulatory Reform in Turkish Energy Industry: An analysis

The Republic of Turkey has initiated an ambitious reform program in the most important segments of her energy market; which requires privatization, liberalization as well as a radical restructuring of these industries. However, there is no consensus that the measures introduced are optimal. The present article attempts, first, to evaluate the regulatory framework created by the laws of 2001 in terms of economic efficiency considerations; and second, to determine what still needs to be done to improve the current situation. The paper not only provides an analysis of these reforms but also lists some policy suggestions. The study concludes that despite relatively good legislative framework, in practice, the reforms in Turkey are far from ideal as they are mainly in the form of “textbook reforms”; and therefore a significant amount of work still lies ahead of Turkey to set up a fully fledged energy market.Turkish energy market; Regulation; Restructuring

Turkey and Europe: Undivided but not united

This article presents Turkey-Europe relations starting with the 19th century up to the present day with a view to understanding the developments that shaped current EU policies toward Turkey. It also pays special attention to the Turkey-EU Customs Union Decision. After making an overall assessment, the author makes some suggestions concerning Turkey's future relations with the EU. The article concludes that despite strong Turkish desire to join the EU, potentially Turkey is the last country in Europe to expect membership in the EU due to economic, political and, especially, cultural reasons.Turkey, European Union, Customs Union, EU Enlargement

A Review of Turkish Natural Gas Distribution Market

In Turkey, natural gas consumption started at 0.5 bcm (billion cubic meters) in 1987 and reached approximately 35 bcm in 2007. Turkish natural gas usage is projected to further increase remarkably in coming years. In 2001, a reform process was started to create and strengthen a competitive natural gas market. However, the reform has not worked out as expected so far. The present article discusses the application of auctions in Turkish natural gas distribution zones. After presenting a short summary of current literature, natural gas utilization and recent developments in Turkish natural gas market, we draw attention to our main focus, namely city natural gas tenders. Having described the tenders, we present problems associated with them. In the end, we touch upon some regulatory issues and provide some suggestions for improvement.Natural gas distribution; Auction; Turkey

The impact of power market reforms on electricity price-cost margins and cross-subsidy levels: a cross country panel data analysis

One of the main expectations from power market reform has been a reduction in price-cost margins and cross-subsidy levels between industrial and residential consumers. This paper focuses on this issue by looking at the impact of the electricity industry reforms on residential and industrial electricity price-cost margins and their effect on cross-subsidy levels between consumer groups. Using panel data for 63 developed and developing countries covering the period 1982–2009, empirical models are developed and analyzed. The research findings suggest that there isn’t a uniform pattern for the impact of reform process as a whole on price-cost margins and cross-subsidy levels. Each individual reform step has different impact on price-cost margins and cross subsidy levels for each consumer and country group. Our findings imply that reform steps have different impacts in different countries, which supports the idea that reform prescription for a specific country cannot easily be transferred to another one. So, transferring the formal and economic structure of a successful power market in a developed country to developing countries is not a sufficient condition for good economic performance of the electricity industries in developing countries. Furthermore, the study suggests that power consumption, income level and country specific features constitute other important determinants of electricity price-cost margins and cross-subsidy levels.Models with Panel Data; Power Market Reform; Electricity Prices

Who Controls the Price Level?

Under the guidance of monetarist theory and the issue of dominance, this study is a survey of a rapidly growing literature on Fiscal Theory of Price Level, which opens up new horizons in a non –Ricardian world and questions the effectiveness of monetary policy on price level determination.inflation, price level, FTPL, non Ricardian

Who Controls the Price Level?

Under the guidance of different theories and the problem of dominance and activeness, this study gives a survey of the rapidly growing literature on Fiscal Theory of Price Level, which opens up new horizons in a non–Ricardian world and questions the effectiveness of monetary policy on price level determination.inflation, FTPL, non-Ricardian