Incentive Regulation Of Public Utility Under The Background Of Marketization

As a series of special industries, public utility plays a very important role in the national economy. Since long time ago, the department of utility had been run by government as a part of social welfare. This pattern could cause many problems. However, taken account of the traits, utility cannot be marketized totally and perfectly. There is lack of regulation in new industries and, on the other hand, abuse in the traditional industries, affected by the old planned economy. We need an advanced principle or idea to rebuild the system of regulation policy.The theory of incentive regulation is derived from regulation economics and imbibed the latest results of information economics and principal-agent theory. On the lay of micro control on industry by government, it is the forward subject of industrial economics and governmental economics. It focuses on the situation of imperfect information and how to regulate the economic behaviors of market participants. This thesis studies the application of incentive regulation in the domain of utility. First, it defines some basic conceptions, and reviews the path of regulation economics, especially the principal-agent theory. Secondly, it analyzes the situation of information asymmetry of utility on the background of marketization. The author believes different solutions should be designed depending on the traits of different industries. In addition, it analyzes some factors which could affect the realization of incentive regulation. Finally it puts forward particular advice on regulation rebuilding based on the actuality of utility in China.