Rationale for Regulation, Including Regulation of Monopolies and Oversight of Competitive Markets, Public Interest Theory, Interest Group Theory, and the Difference Between Normative and Positive Theories of Regulation.

Core References

Understanding Regulation: Theory, Strategy, and Practice
New York: Oxford University Press, 1999.
Baldwin, Robert, and Martin Cave

Examines the rationale for regulation, including issues of monopoly and market power, externalities, information asymmetries, and public goods. Also summarizes positive theories of regulation, including public interest theories, interest group theories, and private interest theories.

Managing the Regulatory Process: Design, Concepts, Issues, and the Latin America and Caribbean Story
Washington, D.C.: The World Bank Group, 1999.
Guasch, J. Luis, and Pablo Spiller

Explains contracting issues that give rise to regulation, including problems of government commitments to the operator, market failure, desire for cross subsidies, and interest group politics.

The Economics of Regulation: Principles and Institutions
Cambridge, MA: MIT Press, 1988, Reissue Edition, Chapter 1.
Kahn, Alfred

Explains common reasons cited for regulation, including the importance of the sector, the existence of natural monopoly or market failure, the desire of government to use franchises or to encourage non market-based outcomes (such as service distribution), problems with destructive competition or undesirable discrimination, cream-skimming, and excessive non-price rivalry. Also describes the legal rationale for regulation in the U.S.

Privatization, Restructuring, and Regulation of Network Industries
Cambridge, MA: MIT Press, 1999, Chapters 1 and 4.
Newbery, David M.

Describes normative and positive theories of regulation. Explains that “regulation … is inevitably inefficient because of problems of information and commitment and, more fundamentally, because of inefficient bargaining between interest groups over potential utility rents.”

Sectoral References


Reforming Power Markets in Developing Countries: What Have We Learned?
Energy and Mining Sector Board Discussion Paper No. 19. Washington, D.C.: World Bank, September 2006.
Besant-Jones, John E.

Describes motivations for electricity sector reform, the strategic decisions, and lessons from case studies.


Competition in the Natural Gas Industry: The emergence of spot, financial, and pipeline capacity markets
Note no. 137 in Public Policy for the Private Sector. Washington, D.C.: World Bank Group, March 1998.
Juris, Andrej

Describes basic restructuring and trading arrangements in gas and pipeline markets.


ICT Regulation Toolkit
Washington, D.C.: infoDev and the International Telecommunications Union, 2007, Module 1.

Provides an overview of reasons for regulation of private telecommunications operators.

Telecommunications Reform – How to Succeed

in Public Policy for the Private Sector. Washington, D.C.: World Bank, October 1997.
Wellenius, Björn

Explains role of regulation in telecommunications reforms.


Best Methods of Railway Restructuring and Privatization
CFS Discussion Paper Series, number 11, World Bank, Washington, D.C., 1995.
Kopicki, Ron and Louis Thompson

Provides context and guidance to restructure the railways. Addresses distinct structural issues associated with rail enterprise reform, design of specialized intermediary institutions that carry out much of the work of railway restructuring, and management techniques that are appropriately adapted to railway reform and restructuring. Focuses on “best” methods built on seven case studies of recent railway restructuring efforts: Japan National Railway, New Zealand Railways, Argentina Railways, Swedish Railways, British Railways, and railroads in the United States, and Canadian Railways.

Africa Infrastructure Country Diagnostic: Stuck in Traffic: Urban Transport in Africa
Working Paper number 44980, World Bank, Washington, D.C., 2008.
World Bank and Sub-Saharan Africa Transportation Project

Summarizes recent research on urban transport in 14 large African cities. Provides a comprehensive overview of the state of urban transport in Africa, with a view to drawing out the main challenges facing the sector and illustrating the different ways in which these have been addressed.

Privatization and Regulation of Transport Infrastructure: Guidelines for Policymakers and Regulators
World Bank Institute Development Study, World Bank, Washington, D.C., 2000.
Estache, Antonio

Addresses liberalization of transport policies and the role played by private operators and investors in transport infrastructure. Provides an overview of why economic regulation is important and examines four subsectors: airports, ports, railways, and roads. Discusses for each subsector: relevance from the viewpoint of a regulator; main privatization and regulation trends; price and quality regulation issues that characterize the sector, and performance indicators that the sector’s regulators should be able to rely on to be effective in their jobs.

Public and Private Sector Roles in the Supply of Transport Infrastructure and Services
Transportation Paper Series number 1, World Bank, Washington, D. C., 2004.
Amos, Paul

Provides a framework for identifying and assessing the different models for public and private roles in the transport sector. Highlights policy and regulatory issues which are important in judging the suitability of different models; and summarizes the range of instruments available.


Water Toolkit Module 1: Selecting an Option for Private Sector Participation
Washington, D.C.: World Bank, 1997.
World Bank

Describes options for private sector participation in the provision of water services. Also gives a brief overview of why some countries choose private participation.

Key Words

Privatization, Regulation, Liberalization, Market Reform


Case Studies

Argentina: The Sequencing of Privatization and Regulation
in Regulations, Institutions, and Commitment: Comparative Studies in Telecommunications edited by Brian Levy and Pablo T. Spiller. Cambridge, U.K: Cambridge University Press, 1996, pp. 202-249.
Hill, Alice, and Manuel Angel Abdala