The European Natural Gas Market Reforms Revisited: Differentiating between Regulatory Output and Outcome

Nicole Herweg, Stefan Wurster and Kathrin Dümig
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Nicole Herweg: Department of Political Science, University of Heidelberg, Heidelberg 69115, Germany
Stefan Wurster: Bavarian School of Public Policy, Technical University of Munich, München 80333, Germany
Kathrin Dümig: Department of Political Science, University of Heidelberg, Heidelberg 69115, Germany

Social Sciences, 2018, vol. 7, issue 4, 1-19

Abstract: The article addresses the question of how successful the European natural gas reforms of 1998, 2003, and 2009 have been in terms of increasing competition in the sector. We argue that regulatory provisions are policy output variables, which as such do not affect competition directly. However, successful reforms can have an impact on the market structure, which might lead to increased competition and price reductions. Thus, it is pivotal to differentiate between policy output and outcome variables. Therefore, we first conduct a cross-sectional analysis of the regulatory impact on the market structure. Second, we apply error-correction models to test whether changes in the market structure affected the price development. Our findings suggest that the market reforms were successful in terms of liberalizing the sector, whereas the market structure did not affect the natural gas prices. Thus, we see a “successful failure” of the European natural gas market reforms.

Keywords: energy policy; European public policy; gas prices (search for similar items in EconPapers)
JEL-codes: A B N P Y80 Z00 (search for similar items in EconPapers)
Date: 2018
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