Natural Monopoly Regulatory Reform Of The International Comparative Study

Applying the comparative approach, with rich industrial cases, my doctoral dissertation analyzed the regulation reform of the natural monopoly industries. The dissertation mainly analyzed the owership structure, market stucture and regulation institution reform in the UK, USA, Russia and China, much attention is also paid to the game between different interest groups and interest balance machanism from the perspective of new political ecomomy, which disclose the essence of the narural monopoly regulation reform.Theory of new political economy showed that, agents with the same interest will form interest group and try to affect the policy of government. The essence of regulation reform is the adjustment and re-equilibrium of interest, and has effection on both of resource allocation and income redistribution. In the regulation refom of natual monopoly industries, there formed consumers group, monopolists group, regulators group, trade union, relative industrial group, and public interest group. Interest groups in different countries have their unique feature and have the different influence in the regulation reform. The regulation reform in our country has the feature of transformation, and all the interest groups are paid great inportance and their interest embodied in the policy.The natural monopoly is defined either by the economics of scale or by subaddictivity, which is the main type of market failure, and the regulation from government is needed. By 1980s, natural monopoly industries had been owned and operated by the state in most countries around the world, except in the USA and Canada, whose were owned and operated by the private enterprises, and at the same time regulated by independent regulation organization. The two regulation methods vary in their regulation scope and extent, but both have the problem of hampering the efficiency of the enterprise, because of soft budget constraint, weak superviser, weak government commitment and unclear enterprise objects. Competition is the only method to enchance the efficiency. The privation of the natural monopoly industries is appropriate to the competition. The UK launched the privation reform in natural monopoly industries in 1980s, Russia and China started in 1990s. The potential gain of the privation may be great, but the realization of it need the government to transform the overall control based on property to the control based on law.The basic method to improve the efficiency of natural monopoly industries is to introduce competition. With the expandsion of the market demand and the progress of the modern technology, the feature of natural monopoly of some industries is declining. There are several modes to introduce competition, including free entry into vertical integration, vertical segment, horizontal segment, network-operation seperation, and networks competition. Because of the advantage of the incumbent, the potential entry firm is often on the position of disadvantagence, the regulation directed to competition is demanded.The UK, USA and China introduced competition in different ways, and embodied the game between the firms and the function of the regulation organization.Regulation is necessary, but the failure of regulation is envitable because of information asymmetry, government's deviation from the public interest, and time inconsistence. The existence of regulation is reasonable when the return of regulation is larger than the cost. To alleviate the extent of the regulation failure, the regulation institution must be resigned, inculding the regulation contract and regulation government. The former is the problem to balance between the incentive extent and the information rent. The latter is the problem to distribute the management power among different government organizations. The developed countries adopted the regulation institution suitable to their own country. China must improve its regulation government so as to adopt high incentive regulation contract.