Administrative Costs of Reforming Utilities

Although administrative costs of regulating network utilities in the post-reform phase co-determine the governments’ ability for correcting markets, they have not yet received the scholarly attention they deserve. Paying heed to this gap, a theory-driven framework to approach ‘administrative costs’ is developed and six cases of recent utility reforms in the United Kingdom and Germany are analysed. The aim is to identify and assess the factors that determine residual public costs after utilities’ reforms. Based on the normative theory of regulation amended by institutionalist features, four variables are outlined: (1) distance to the status-quo-ante, (2) distance to competitive market co-ordination, (3) market structure and (4) veto points of the respective governance regimes. While the developed framework brings new insights into the ‘politics of regulatory reform’, more empirical analysis is needed if a coherent theory of administrative costs of the utilities’ reforms is to be conceived