When Institutions No Longer Matter: Reform of Telecommunications and Electricity in Germany, France and Britain

Abstract

Many studies of privatisation and liberalisation in utility industries stress the importance of national institutions for reform. However, powerful transnational forces and cross-national policy convergence in telecommunications have led to a questioning of the role of institutions. Single sector studies are limited in their ability to assess the relative influence of sector-specific technical and economic forces in the policy process. This article presents a cross-sectoral and cross-national analysis of privatisation and liberalisation in telecommunications and electricity in Germany, France and Britain in terms of national institutions, techno-economic forces and ideas. Although institutions shape shorter-term policy responses and the emerging regulatory regimes, in the longer term their role is limited to the pace and timing of policy change rather than its impetus and direction. To understand the latter it is necessary to investigate sources of the key ideas which led to reform. The ideas were not embedded within institutions but originated from outside as a response of interests to techno-economic forces and from groups ideologically predisposed to favouring neo-liberal ideas.