1. This paper forms part of the work on economic regulation within the Critical Infrastructure Protection Project (CIPP) at George Mason University. An earlier version of this paper was presented to the seminar on The Industrial Organization of Shipping and Ports, National University of Singapore, 5–6 March 2004. The author is extremely grateful for the comments received at that conference, especially those of the discussant of the paper, Henry Ergas. The responsibility for the paper remains that of the author
2. Institutions here do not (except in specific circumstances) mean ‘organizations’ but rather refer to such things as property rights, conventions, types of contract, authority, etc. Institutional economics is concerned with the way these sets of rights and obligations affect the economic lives of individuals. When markets are talked about in this context this refers of all voluntary transactions. When discussing institutional environments, new institutional economists are thinking about formal rules—international agreements, laws, regulations, property rights, etc. It is much more to do with political economy and concerns issues of levels of decision-making and the role and structures of bureaucracies