Regulatory effectiveness : the impact of regulation and regulatory governance arrangements on electricity industry outcomes

The authors review a number of studies on the effectiveness of utility regulatory agency and governance arrangements for the electricity industry, particularly for developing countries. They discuss governance criteria and their measurement, both legal frameworks and surveys of regulatory practice. They also discuss the results from econometric studies of effectiveness for regulatory agencies in the electricity and telecommunications industries and compare these with the results from econometric studies of independent central banks and their governance. The authors conclude with a discussion of policy implications and of priorities for information collection to improve understanding of these issues.National Governance,Banks&Banking Reform,Governance Indicators,Administrative&Regulatory Law,Municipal Financial Management

Infrastructure Underpinnings of Trustworthiness in Infrastructure Contracts: Trust and Trust Perceptions

This paper discusses trust and trust perceptions in infrastructure contracts. We focus on perceptions of the trustworthiness of the government purchasers of infrastructure services (a) by supplying companies and (b) by governments. In particular, we allow for trust misalignments which may give rise to "undertrusting" and "overtrusting". The core of the paper sets out a game theoretic model of contracts which we use to explore the impact of trust misalignment both on economic efficiency and on investment levels, taking account both of asset specificity issues and maladaptation costs. We explore flexible contracts with and without pre-payments, rigid contracts (which do not allow for post-investment renegotiation) and hybrid contracts. Their efficiency is compared to an incentive compatible benchmark contract. The model is also used to shed light on current issues on the sustainability of private investment infrastructure contracts both in OECD countries (e.g. PPPs) and in developing countries.Regulatory Reform

Brexit, competition and markets: there’s a need to spread the benefits of growth

London and the South-East plus metropolitan and major university towns are markedly more pro-market and pro-competition than much of the rest of the UK. This is reflected in the geographical pattern of Brexit referendum results. In this post, Jon Stern examines the future of competition policies, as well as the perceptions of fairness and legitimacy of pro-market competition and industrial policies in a post-Brexit UK

Modelling the Costs of Electricity Regulation: Evidence of Human Resource Constraints in Developing Countries

Successful electricity industry reform depends on the presence of an appropriately staffed regulatory agency for the liberalised sector. However developing countries can have resource constraints that make the establishment of an effective regulatory agency difficult. This paper attempts an econometric modelling of staff numbers in electricity regulatory institutions. We specify a model of the determinants of staff numbers that reflects electricity system complexity as well as national economic and regulatory environments. We empirically estimate a translog cost function specification of the model using data on 60 electricity regulators collected from an international questionnaire survey in 2000-01. We conclude that there are significant differences between the regulatory cost functions of developed and developing countries and that, in establishing independent regulatory agencies, developing countries face high fixed costs relative to market size.Electricity Regulation; International Comparisons; Human Resources

The influence of shc proteins on the whole body energetic response to calorie restriction initiated in 3-month-old mice.

There is increasing evidence that Shc proteins play a role in energy metabolism, and we have previously reported that knockdown of Shc proteins influences the energetic response to acute (3 days) calorie restriction (CR) in 18-month-old mice. Whether Shc proteins play a role in the metabolic response to CR in younger mice has yet to be elucidated. Hence, we sought to determine the impact of 3 days and longer term (2 months) CR on energy expenditure (EE) and respiratory quotient (RQ) in 3 month-old Shc knockout (ShcKO) and wild-type (WT) mice. ShcKO mice decreased (P < 0.001) EE normalized for body weight (EEBW) by 3 days of CR, while no such change was observed in WT animals. However, both ShcKO and WT mice decreased (P < 0.001) EEBW at 2 months of CR and there were no differences in body weight between the ShcKO and WT mice at either 3 days or 2 months of CR. Consistent with increased fatty acid oxidation, only ShcKO mice maintained decreased (P < 0.001) 24 h RQ through 2 months of CR, suggesting that they were able to maintain increased fatty acid oxidation for a longer period of time than WT mice. These results indicate that Shc proteins may contribute to some of the acute energetic responses to CR

The influence of shc proteins and aging on whole body energy expenditure and substrate utilization in mice.

While it has been proposed that Shc family of adaptor proteins may influence aging by regulating insulin signaling and energy metabolism, the overall impact of Shc proteins on whole body energy metabolism has yet to be elucidated. Thus, the purpose of this study was to determine the influence of Shc proteins and aging on whole body energy metabolism in a mouse model under ambient conditions (22°C) and acute cold exposure (12°C for 24 hours). Using indirect respiration calorimetry, we investigated the impact of Shc proteins and aging on EE and substrate utilization (RQ) in p66 Shc-/- (ShcKO) and wild-type (WT) mice. Calorimetry measurements were completed in 3, 15, and 27 mo mice at 22°C and 12°C. At both temperatures and when analyzed across all age groups, ShcKO mice demonstrated lower 24 h total EE values than that of WT mice when EE data was expressed as either kJ per mouse, or adjusted by body weight or crude organ mass (ORGAN) (P≤0.01 for all). The ShcKO mice also had higher (P<0.05) fed state RQ values than WT animals at 22°C, consistent with an increase in glucose utilization. However, Shc proteins did not influence age-related changes in energy expenditure or RQ. Age had a significant impact on EE at 22°C, regardless of how EE data was expressed (P<0.05), demonstrating a pattern of increase in EE from age 3 to 15 mo, followed by a decrease in EE at 27 mo. These results indicate a decline in whole body EE with advanced age in mice, independent of changes in body weight (BW) or fat free mass (FFM). The results of this study indicate that both Shc proteins and aging should be considered as factors that influence energy expenditure in mice

Independent Utility Regulators: Lessons from Monetary Policy

This paper explores the similarity of the underlying economic problems that lead to the establishment of (a) independent central banks to operate national monetary policies and (b) independent regulatory agencies for telecommunications and other utility service industries. We show that, in both cases, the adoption of agencies inde- pendent of government results from the need to achieve credibility and a reputation for economically sound long-run behaviour while preserving signi¯cant discretion to handle unanticipated events. We show that this solution is superior to policy rules that are ¯xed in advance. Both for central banks and regulatory agencies, what is re- quired are institutions that provide limited and accountable discretion within a clear policy framework, for example via high levels of accountability and transparency in their decision making processes. On the basis of a review of the empirical literature, we argue that central banks with superior governance arrangements, particularly on accountability and transparency, out-perform those with inferior arrangements and we discuss how this work might be extended to utility regulatory agencies.Monetary policy, credibility, regulation, under-investment, delegation.

Regulatory Effectiveness and the Impact of Variations in Regulatory Governance: Electricity Industry Capacity and Efficiency in Developing Countries

This paper assesses for 28 developing countries over the period 1980-2001 whether the existence of a regulatory law and higher quality regulatory governance are significantly associated with superior electricity outcomes. The analysis draws on theoretical and empirical work on the impact of independent central banks and of developing country telecommunications regulators. The empirical analysis concludes that, controlling for other relevant variables and allowing for country specific fixed effects, a regulatory law and higher quality governance is positively and significantly associated with higher per capita generation capacity levels. In addition, this positive impact continues to increase for at least three years and probably for over 10 years as experience develops and regulatory reputation grows. The results are robust to alternative dynamic specifications, eg as estimates from alternative lag structures and for the application of an error correction model, and show no sign of any significant endogeneity biases.Regulatory Reform, Other Topics

Modelling the Costs of Electricity Regulation: Evidence of Human Resource Constraints in Developing Countries

Modelling the Costs of Electricity Regulation: Evidence of Human Resource Constraints in Developing Countrie