Liberalization Package Research Articles

Competition, Productive Capabilities and Structural Transformation in South Africa

Competition law has been promoted across developing countries as part of a market liberalisation package which is premised on a neo-classical model of competition, privileging static allocative efficiency and largely ignoring production. This article critiques this approach through an assessment of its application in South Africa where substantial weight was given to competition law. Building on the critical assessment, the article proposes an alternative framework based on the conception of ‘optimal competition’ of Amsden and Singh (The optimal degree of competition and dynamic efficiency in Japan and Korea. Eur Econ Rev 38:940–951, 1994). It does this through assessing the relationship between competitive rivalry, productive investment and the development of capabilities in two key industry groupings in South Africa, metals and machinery, and plastics and chemicals. We argue that the failure to develop diversified production capabilities in South Africa reflects the entrenched incumbent firm advantages and the lack of a coordinated policy agenda which proceeds from a recognition of economic power and the need to reshape markets to alter competitive rivalry. An optimal competition framework allows analysis of dynamic rivalry and capabilities development.

Processi di liberalizzazione tra integrazione continentale e conflittualità internazionale. Italia, Europa, Oece (1947-1953)

L'articolo prenderà in esame l'esperienza dell'Italia all'interno dell'Organizzazione per la cooperazione economica europea (Oece) negli anni della prima legislatura repubblicana.A partire da una riflessione sulle motivazioni tanto economiche quanto politico-diplomatiche che si posero alla base dell'adesione italiana all'Oece, questo contributo analizzerà le misure di liberalizzazione commerciale perseguite dal paese all'interno degli organi decisionali dell'organizzazione. Si darà risalto alla dimensione europea delle iniziative che l'Italia elaborò nell'ambito della progressiva riduzione di dazi, tariffe e contingentamenti alle importazioni di beni provenienti dai mercati internazionali. Si passeranno in rassegna le principali iniziative presentate in sede Oece dalla delegazione italiana e verranno presi in considerazione i provvedimenti promossi a livello europeo da parte dei maggiori partner della Penisola: i piani Stikker e Pella (1950); la nascita dell'Unione europea dei pagamenti (Uep, 1950); il pacchetto di liberalizzazioni introdotto da La Malfa (1951); la reintroduzione delle restrizioni quantitative da parte di Regno Unito e Francia (1951-1952).Questo contributo intende perciò sondare la natura, i presupposti e gli esiti della "filosofia liberalizzatrice" sviluppata dalle classi dirigenti dello stato italiano nel più ampio contesto del processo di integrazione economica del Vecchio continente e della genesi di quello che sarebbe poi divenuto il mercato comune europeo.

Agencja ds. Współpracy Organów Regulacji Energetyki

The Agency for the Cooperation of Energy Regulators (ACER) has been established in 2009 in the Third Liberalization Package of Energy Sector. The Agency became fully operational in 2011. After 5 years of its functioning the Author presents his opinion on general issues like legitimacy of the European Union regarding the tendency of creating new European agencies (among them ACER) and the problem of the common belief in rule of experts in the typical field of politics. Subsequently the paper handles the history of setting up the Agency and the description of its bodies and competencies in order to present the achievements of ACER within 5 years of its work. The Author concludes with positive statement: ACER meets its goals, encompassing the principle of subsidiarity and helping the Commission and National Regulatory Authorities in realizing the aim of establishing the common energy market in European Union.

Is Russian Energy Policy towards the EU Only about Geopolitics? The Case of the Third Liberalisation Package

ABSTRACTRussian external energy policy is frequently described as geopolitical (as opposed to EU energy policy, which is often characterised as market-based). This article reviews geopolitical and market approaches in existing studies and identifies paradigmatic and instrumental levels in each of them. It then proceeds to demonstrate that although the geopolitical paradigm dominates in Russia, Russia has also reacted to the EU’s third liberalisation package, using legal and technocratic instruments, which are parts of the market approach. Each set of instruments has its institutional basis in Russia: the President, the Ministry of Foreign Affairs (MFA) and Gazprom work in geopolitical ways but with frequent recourse to legal instruments, the Ministry of Economic Development (MED) promotes legal instruments and the Ministry of Energy (ME) is the centre of the technocratic activities, which Gazprom also frequently applies at present. This study therefore provides a more complex picture of Russian external energy policy. Moreover, it reveals a potential opening for a degree of policy convergence between the EU and Russia. In this context it is regrettable that legal and technocratic instruments were compromised as a result of the 2014 worsening in EU-Russian relations.

Risk Factors in Energy Utility Returns: An Augmented-Four-Factor Model

In this paper we utilise the risk factors from both the finance and energy economics literatures to develop an improved asset pricing model (the Augmented-Four-Factor Model or AFFM) in the context of the European energy utility sector. In addition, we undertake inter-sectoral and inter-temporal analyses using the risk factors in our AFFM. Our results show our AFFM captures the greatest proportion of returns relative to other models. Further, stock market risk factors (most notably the market, size, value and momentum premia) explain a much greater proportion of average returns than term and commodity risk factors. Our inter-sectoral results show that, relative to other sectors, energy utilities are defensive stocks over the period analysed (1996 to 2013). However, our inter-temporal analysis shows that market beta has been increasing through time, from 0.710 in 1996 to 1.037 in 2013; the European energy utility sector is becoming increasingly exposed to systematic risk. Further, despite regulatory changes, designed to counteract the dominance of big energy utilities, the size premium has increased over time. Finally, the value and momentum premia are evident one to two years after the three EU energy sector liberalisation packages of 1996 and 1998, 2003, and 2009. In particular, the energy sector becomes extremely distressed following the third liberalisation package.

ASEAN Economic Community and Small-Medium Enterprises: An English School Perspective

Accounting for 30-60% of GDP of ASEAN member states and the largest source of employment for all economic actors, small medium enterprises is a very important economic actor in Southeast Asia. The SME sector in ASEAN, however, is confronted with a wide-range of structural, financial and other challenges, among which are limited access to finance, technologies and markets. ASEAN has many important roles in developing SMEs. ASEAN institutions can guide, direct, and fund many development programmes related to SMEs. Moreover, AEC, a new set of regional liberalization package, will have important consequences to SMEs’ growth in the ASEAN member states. Therefore this paper will ask the impact of AEC to SMEs in ASEAN member states using English School Theory. It also asks the role of ASEAN in promoting SME development toward AEC. In this paper, interview and content analysis will do as the main data source. This paper concluded that ASEAN has developed a comprehensive empowerment plan through Strategic Action Plan for ASEAN SME Development but lack of coordination between ASEAN institutions has hindered the full implementation of the plan.

Greek airports in transition: From public ownership to PPP concessions

The third air transport liberalisation package in the EU was fully implemented in Greece in July 1998. Nevertheless, little has changed since then in terms of the geographical dispersion of air traffic flows. The recent financial downturn of the Greek economy led to a substantial deterioration of traffic, particularly in the domestic market. The Greek state concluded an airport concession tender process in late 2014 with potentially important repercussions not only for the 14 regional airports in question but also for the wider aviation market in Greece. Nonetheless, a newly elected government announced in early 2015 that it will re-examine the whole issue, building, among other factors, on the opinions, concerns and reactions expressed by various interested groups including senior staff in affected airports. On these grounds, the present paper discusses the findings of semi-structured telephone interviews with all 39 Greek airport managers to identify the rationale behind this stance. Moreover, issues related to airport operations and development prospects are addressed from various viewpoints. The paper concludes with policy suggestions, taking into account the existing literature on airport management and ownership while combining the findings from desk and empirical research undertaken by the authors.

Energy Poverty in Slovakia

With enacting the third energy liberalization package in 2009 the increased concern in protection of households in energy poverty started. The Slovak Republic has not have experience with definition of energy poverty. Therefore, it is important to set up its appropriate definition and measures for support of consumers in energy poverty.The article analyses different definitions of energy poverty and their applications on a Slovak household. We introduce roots and principles of protection of European households in energy poverty and analyse a situation in Slovakia from the point of regulatory norms and statistical data.

Geographical context of energy prices in the European Union Member States with special emphasis on the Slovak Republic

Abstract The issue of energy prices presents an extremely topical subject with a major impact on human society. Energy demand is constantly increasing and most regions of the world are facing serious difficulties in ensuring sufficient energy supplies. However, not only global events affect energy prices in the particular country. National energy markets are highly specific and some local factors may also prove significant. In our contribution we focus on the Slovak Republic and try to analyze the major political and economic factors affecting the final price of energy, particularly of gas and electricity. We pay attention to the period from the accession of the country to the European Union in 2004 until 2011 characterised by ‘third liberalisation package’ that is associated with a wide range of major changes. Largely monopolized energy market has been gradually opening up to competition and the countries with regulated prices have been facing the increasing pressure to let the free market decide. Progressive liberalisation of energy markets enables consumers to use the energy services offered by various private companies. This new element operating in the energy sector is largely reflected in final energy prices. Thus, the main goal of this study is to highlight the price disparities between different energy commodities in European Union member states since we are at present witnesses to of significant regional disparities in energy prices. We try to analyze current energy prices with respect to GDP (regarding purchasing power parity as well) to ensure that resulting comparison would reflect the financial potential of the population. Demonstrating the effects of the economic crisis on energy prices in different countries will be another important aspect of this contribution.

The role of the European Union in private law relations of organizations operating in the internal electricity or gas market in medium and small size Member States

This paper studies European Union (EU) legislation on private law relations for organizations operating in the internal electricity and gas market in medium and small size Member States. It consists of the analysis of both the EU primary (Treaties) and secondary (directives and regulations) legislation. A survey was sent to organizations operating in the internal energy market in four Member States: Greece, Czech Republic, Finland, and Malta. Through the survey, the paper identifies problematic areas of current EU legislation and compares them with new legislation applied as from 3 March 2011 (third liberalization package). It looks into all important EU energy legislation on private law relations of organizations operating in the internal energy market such as unbundling, procurement, procedural law, duties related to information and other legislation on energy contracts. The study concludes that, despite some small problems, the energy liberalization including the third liberalization legislative package progresses in a correct manner. There are nearly no problems in the access to the transmission and distribution systems. The functioning of the gas market is considered as the most important problem.

El ciclo político-económico en Estados Unidos (1991-2004). De la nueva economía de Clinton a la economía de guerra de Bush

The Bush mandate is mediated by 9/11. This forced the political-economic managers to a tough test of credibility, solvency and effectiveness. With the attacks also collapsed a way of managing the apparent prosperity of the New Economy. The Republican Bush team presented an electoral economic offer with a strong neoliberal content, with a liberalization package at the service of large corporate and industrial interests, with which the Republicans tried to turn the page to the Clinton era. Instead, 9/11 produced the Keynesian resurrection to the point that the ever-vigilant Federal Reserve and its watchdog Greenspan dusted off the Keynesian manual for immediate action. This second part of this paper summarizes the considerations that explain the mutation of Bush's economic policy management, from the neoliberal component of the 2000 program to the interventionist practice to overcome the strong recession after 9/11.

Intelligent Grid: Unfinished Regulation in the Third EU Energy Package

The introduction of intelligent grids and/or intelligent metering systems promises much from the perspective of the three pillars of European law and policy: security of supply, sustainable development and competition. The analysis in this article mainly covers the legal provisions of the third energy liberalisation package of the European Union (EU) and the regulatory challenges connected with the introduction of intelligent grids and/or intelligent metering systems. Legal regulations in the new liberalization directives seem to be ‘unfinished’ as the development of intelligent grids and/or intelligent metering systems is dynamically evolving. The author argues that the uncertainty of future legal provisions should not be considered as a barrier to intelligent grids and/or intelligent metering systems deployment and presents his prognosis of the future development of legal regulations in this respect. Furthermore, the author suggests that the deployment of smart grids will change many aspects of regulatory policy, which will have to evolve towards ‘output-based regulation’.

INVESTIGATION OF EUROPEAN AIR TRANSPORT TRAFFIC BY UTILITY‐BASED DECISION MODEL

Air transport was traditionally a strictly regulated industry, dominated by national flag carriers and state‐owned airports. The global deregulation and liberalisation of air transport resulted in numerous changes, including the evolution of price competition, emergence of low‐cost airlines, growth in load factor, airport and airspace capacity problems, etc. Later, the internal market eliminated all commercial restrictions for airlines flying within the European Union (EU). Constraints on routes, number of flights, regulated tariff policies, etc. were removed. Since the issue of the third liberalisation package, EU airlines are permitted to provide air services on any route within the EU. As a result, prices have fallen dramatically, especially on the most popular routes. The air transport sector has had the highest rate of development recently. These issues are discussed in the introduction of this paper. The main scope is to investigate air passenger transport within Europe and to present the mathematical formulation of a disaggregate airport choice model created by the authors. A complex utility function‐based model has been developed and verified by the authors. The results of the model are in scope with experience in the real world. Santrauka Pastaraisiais metais pastebimas itin intensyvus transporto sektoriaus vystymasis, pasireiškiantis mažinamomis kainomis, nauju pigiu avialiniju atsiradimu bei ivairiu komerciniu apribojimu panaikinimu. Pagrindinis šio darbo tikslas yra ištirti keleiviu pervežima oro transportu Europos Sajungos ribose ir pristatyti pasirinkto atskiro oro uosto modelio matematine formuluote. Modelis, paremtas kompleksinemis panaudojimo funkcijomis, buvo patobulintas ir patikrintas pačiu autoriu, o gauti rezultatai atitinka realia patirti.

Who Controls Polish Transmission Masts? At the Intersection of Antitrust and Regulation

This paper will be devoted to the most acute point of intersection between sector specific regulation and the enforcement of competition law – a parallel scrutiny of the market position and behaviour of EMITEL TP, an incumbent infrastructure holder in the Polish broadcasting transmission field, by the national telecoms regulator and the antitrust authority. After presenting the relevant EU background, the discussion will focus on four basic factors that have influenced the relationship between antitrust and regulation in this case. The peculiarities of national legislation transposing the EU liberalisation package will be considered first, followed by the state of competition in Polish telecoms and the potential existence of prohibited market practices. Emphasis will be placed here on the use of the antitrust concept of relevant market definition in the framework of sector-specific regulation. The analysis will continue with an assessment of the differences between the two types of market intervention noted by the authorities in the context of a potential competence dispute. In conclusion, the need will be presented to shift the current focus placed on the separation of antitrust enforcement and regulation, which has made them both ineffective in achieving their purpose, towards that of their combination in order to facilitate the emergence of competition in the Polish broadcasting transmission services field.

The Third European Energy Liberalization Package: Does Functional and Legal Unbundling in the Gas Storage Sector Go Too Far?

The third European gas liberalization package (the 3rd Package) is intended to facilitate access to gas storage through the introduction of functional and legal unbundling in the storage sector. This article will challenge this new regulatory regime from two perspectives. First, this new regime may change the originally coherent regulatory patterns in the 1st and 2nd Gas Directives without taking into account the economic rationales. Second, this new regime will lead to three serious concerns upon implementation, i.e., the cost-effectiveness, clear implementation of the unbundling, and the doctrine of ‘rigid unbundling as a last resort. For the purpose of finding a solution, this article provides three legislative suggestions to the 3rd Package. In spite of these efforts, the issue of the unclear scope of storage subject to the open access regime and to the functional and legal unbundling remains unresolved in the 2nd Gas Directive and 3rd Package. Thus, to facilitate access to storage, it is suggested that the Commission may have to clarify the scope issue first and consider adopting a more direct approach; i.e., it should consider the regulated third party access regime for the storage sector in the 3rd Package instead of the indirect approach of further unbundling.

Towards a New Trade 'Marshall Plan' for Least Developed Countries: How to Deliver on the Doha Development Promise and Help Realize the UN Millennium Development Goals?

At no time have our civilization and the principle of solidarity been tested more than at the present time when one sixth of the world's population lives in abject poverty and 50 countries - big and small - are categorized as least developed and caught in a seemingly endless poverty trap.This paper sets out a new and comprehensive vision for a trade-related support plan for LDC's, who at present are unable to profit from trade liberalization and beneficially integrate into the international trading system and the global economy. Drawing upon historical experience with the Marshall where the US reconstructed a war devastated Europe ground up, it calls for practical and concrete commitments, policies and measures in favour of LDC's. Its arguments rest essentially on three pillars of such a Marshall for LDCs. The first pillar is the provision of WTO bound duty free quota free treatment (DFQF treatment) by developed countries, coupled with effective standards-related capacity building in LDCs to overcome market entry barriers. The DFQF treatment alone is likely to bring welfare gains of as much as US$8 billion and will add up to US$6.4 billion (10 per cent) per year increase in LDC exports, which currently represent just 0.68 per cent of world trade. The second pillar would be a liberalization package in services, which would include measures to operationalize LDC priority areas, specifically in Mode 4 access. A liberalization package in Mode 4 coupled with a capacity support package in trade in services for LDCs is estimated to generate 10-20 billion USD per year. The third pillar envisages the creation of a one billion USD Aid for Trade Fund which would provide much needed finance to meeting adjustment costs arising from trade reform, help provide the hardware and software of trade-related infrastructure and supply capacity and competitiveness building in commodities, manufacturing and services. The first two pillars are based on a trade-for-aid logic whereas the third pillar rests on an aid-for-trade logic. The position of LDCs today is similar to the immediate condition of post WWII Europe, and if a similar initiative to the Marshall were to be envisaged for LDCs today, US $62.5 billion per year of additional resources would be needed. A Marshall Plan for LDCs could deliver a large part of that amount. From an LDC perspective such funds would cushion adjustment shocks build productive capacity, competitiveness and critical infrastructure; generate employment and at a human level lift millions of people out of poverty leading to sustainable trade growth within the LDCs and in turn creating new and viable markets for other countries. The paper argues that there is now a happy confluence of a strong moral imperative in the context of poverty alleviation, political consensus in terms of contributing to the achievement of the Millennium Development Goals (MDGs), economic justification representing major development gains and institutional and legal viability of mechanisms and measures to operationalize such a Marshall for LDCs. Pointing out that the window of opportunity in relation to the implementation of DFQFT treatment to LDC exports is limited in time, the paper makes a strong plea for a comprehensive decision to be taken at the United Nations Millenium 5 Summit in September 2005 and at the WTO Hong Kong Ministerial in December 2005.

The Third European Energy Liberalization Package: Does Functional and Legal Unbundling in the Gas Storage Sector Go Too Far?

The third European gas liberalization package (the 3rd Package) is intended to facilitate access to gas storage through the introduction of functional and legal unbundling in the storage sector. This article will challenge this new regulatory regime from two perspectives. First, this new regime may change the originally coherent regulatory patterns and regulatory hierarchy in the 1st and 2nd Gas Directive without taking into account the economic rationales. Second, this new regime will lead to three serious concerns, i.e. the cost-effectiveness and clear implementation of the unbundling, and the doctrine of 'rigid unbundling as a last resort, when implementing. In this regard, for remedy purpose, this article provides three legislative suggestions to the 3rd Package. However, in spite of these efforts, the issue of the unclear scope of storage subject to the open access regime and to the functional and legal unbundling remains unresolved in the 2nd Gas Directive and 3rd Package. Thus, to facilitate access to storage, it is suggested that the Commission may have to clarify the scope issue first and consider adopting a more direct approach, i.e., the regulated third party access regime for the storage sector, in the 3rd Package, instead of an indirect approach of further unbundling.

Productivity growth and structural changes in a partially liberalised market: a distance function approach

The question of whether an industry experiencing rapid structural change will demonstrate productivity growth at the same time is unresolved. This paper uses a panel data sample of European airlines over the period of partial market liberalisation (1991?1995) to investigate whether productivity growth was affected in the immediate aftermath of this structural change. The empirical measurement in the paper is based on the comparison of a time-varying stochastic parametric distance function with conventional Data Envelopment Analysis (DEA). This function is used to generate a parametric stochastic estimate of the Malmquist productivity indices. The indices include a returns to scale effect to provide the proper total factor productivity indices. These are compared with the nonparametric estimates. The measures of productivity change are consistent across both methods, with efficiency change dominating technical change in the response to the third liberalisation package in the European airline industry.

La Banque mondiale, la corruption et la gouvernance

Jean Cartier-Bresson — The World Bank, corruption and governance. The article presents a critical analysis of the way the World Bank apprehends the State, through «good governance» as a depoliticised form of power relationships. It studies the manner in which the concept provides the referential framework for the fight against corruption by the international institution, as part of the economic liberalisation package. It argues that a strategy based on the virtues of social networks and on the reduction of the public sector involvement in weak, hardly democratic States, may drive corruption from past forms to new ones, instead of reducing the phenomenon.

GATT, GATS and the global construction industry

On 15 December 1993, the most ambitious trade liberalisation package in history was concluded, marking the end of multilateral trade negotiations under the aegis of the General Agreement on Tariffs and Trade (GATT). Among the landmark achievements of that round was the addressing of the services sector for the first time in such a setting. This paper analyses the key provisions of the General Agreement of Trade in Services (GATS) in the context of the construction industry. Despite the fact that GATS is presently a framework which requires further negotiation, there are already certain matters that corporate strategists should be conversant with in preparation for the time when full trade surveillance is imposed on the industry. Specific reference is also made to the Government Procurement Agreement towards the end of this paper because of its galvanising force on future GATS negotiations.