CPB Document 73
Better safe than sorry? Reliability policy in network industries.
ISBN 90-5833-202-0
December, 2004
Victoria Shestalova (tel: +31-70-338446)
This report develops a roadmap for reliability policy in network industries.
Based on economic theory, we analyse the relationship between reliability and
various types of government policy: privatisation, liberalisation, regulation,
unbundling, and 'commitment policy'. We let government policy depend on (1) the
feasibility of competition between networks, (2) contractibility of reliability,
and (3) the relation between profit maximisation and public interests. We test
this roadmap on the basis of the empirical literature and case studies on electricity,
natural gas, drinking water, wastewater, and railways.
Key words: Reliability, Network Industries, Government Policy
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