Liberalization promised a better performance of infrastructures, in terms of higher
economic efficiency, lower consumer prices, better services, and less unwarranted
political influence. After some decades of practical experience, some of these
promises have been materialized, but there have also been serious disappointments.
Now it is time not only to reconsider these merits of liberalization, but, even more
important, to gain better insights into the way ahead. The 10th annual conference
reconsiders the experiences and future prospects of the liberalization of telecom,
electricity, natural gas, water and rail transport. Three related perspectives are chosen:
- The underestimated role of technology.
- The limits towards designing competition.
- The multifaceted performance of liberalized infrastructures.
Often liberalization is solely perceived as an institutional change towards more
competition, privatization and re-regulation, while assuming the technological
specificities as given. However, technologies change as a consequence of
liberalization. Investors experience other incentives, which induces different patterns
of investment. In the best case this results in the development of innovative
technologies like in telecom (competitive networks, gals fiber, gsm, wifi) or
electricity (small scale generation, sustainable energy). In the worst case liberalization
threatens the technical continuity and reliability of infrastructure systems. Several
disastrous accidents in the liberalized British railway sector illustrate this case. Major
blackouts in the electricity sector are another example. Liberalization induces
technological change. It might even be argued that liberalization can only be
successful if it is supported by suitable technological innovation.
Liberalization is about the development of markets in traditionally monopolistic
sectors. In the first decades of restructuring, market design was a very prominent
issue. How to improve the competitiveness, harmonize regional regulation, stimulate
new entrance, avoid unwarranted strategic behavior, and safeguard nondiscriminatory
access to the networks with reasonable tariffs? Increasingly the limitations of this
approach are revealed. Markets behave differently than expected and there are public
interests that need to be safeguarded. There is no ‘one-size-fits-all’ solution for the
development of competitive infrastructure markets. National as well as sectorial
specificities need to be taken into consideration.
The performance of liberalized infrastructures reveals a complex picture. The
liberalization of the telecom sector is often perceived as a success. Competitive
market structures evolved and innovative technologies emerged, which resulted in
lower prices and innovative services. In reality, the picture is much more
multifaceted. In the best case, in many sectors efficiency has been improved and
prices reduced. However, this might have been realized on the expense of certain
public services or the technical reliability of the system. Obviously new trade-offs
have to be found.
Against this background, high-level representatives from academia, industry and
politics provide their view on the past performance and future development of
liberalized infrastructure sectors. On this two-day conference, the morning is reserved
for keynote addresses, and the afternoon for sector specific workshops.
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