Politics and the Pursuit of Efficiency in New Zealand's Telecommunications Sector 1987-2008

Bronwyn Howell

No 19134, Working Paper Series from Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation

Abstract: Economic analysis takes as its defining performance benchmark the pursuit of increases in efficiency. Competition law and industry-specific regulation provide two competing means of intervention whereby the pursuit of efficiency can be enhanced. Ultimately legislators decide how governance of industry interaction will be allocated between these two institutional forms. Whilst competition law can govern interaction in most industries where the underlying economic conditions are sufficiently different industry-specific regulation offers advantages. However its weakness is the risk of capture leading to the subjugation of the efficiency end to the pursuit of other objectives. But if the regulatory institution could be bound in some way to pursue an efficiency objective could the risk of capture be averted? New Zealand's 'light-handed' regulation instituted in 1987 attempted to enshrine the pursuit of efficiency into statute firstly by relying solely upon competition law and contractual undertakings and subsequently creating a regulatory body with an explicit legislated efficiency directive. In practice however the inability of a government prioritising efficiency to bind its successors to pursue the same objective renders sector strategy and hence the efficiency objective subject to political capture. Consequently inherent systemic instability attends the pursuit of the efficiency objective and the institutions overseeing its enforcement.

Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ir.wgtn.ac.nz/handle/123456789/19134

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:vuw:vuwcsr:19134

Access Statistics for this paper

More papers in Working Paper Series from Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation ISCR, PO Box 600, Victoria University Wellington 6140, New Zealand. Contact information at EDIRC.
Bibliographic data for series maintained by Library Technology Services ().