30 years of British utility regulation: Developing country experience and outlook

Abstract

This article examines the impact the UK regulatory model has had in developing and transition countries in the three decades since its inception. It presents data linked to three key features of the model, namely independent regulatory institutions; focus on competition; and greater efficiency in service delivery through incentive-based regulation. The difficulty of formulating statements valid for a very diverse set of countries is acknowledged. Nevertheless, the article argues that despite of the rapid spread of regulatory agencies across the world, the UK regulatory model has been only partially successful in middle- and low-income countries. The main explanation offered is that the ‘de-politization’ of regulatory institutions is more challenging to achieve in a context of below cost-recovery tariffs and continued state-ownership of utilities. But improving the technical soundness of decision making and introducing accountability for operators are key tasks that regulators can address even if the gap to the UK ideal remains in a number of countries.