The Governance Brief: Governance of Asian Utilities: New Regulators Struggle in Difficult Environments (Issue 10-2004)

Abstract

The liberalization of utility sectors means the introduction of competition or commercial incentives by deregulation, re-regulation, and restructuring (i.e., unbundling) of utility companies. Previously, it was thought that natural monopolies would dominate utility sectors. Today, however, competition is recognized as a means to provide incentives for greater investment, while expanding services, enhancing efficiency, and lowering prices. While technological advances have extended the potential for competition, regulation is still necessary to ensure that competition actually emerges. Utility regulation has economic and political aims relevant to public and private utilities alike.