From Hierarchies to Markets: The Electric Power Industry’s Path to Consumer Welfare

От иерархий до рынков: путь электроэнергетики к благосостоянию потребителя

Kolomiyets Aleksandra (Коломиец, Александра) () and Fedorov Sergey (Федоров, Sergey) ()
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Kolomiyets Aleksandra (Коломиец, Александра): Lomonosov Moscow State University
Fedorov Sergey (Федоров, Sergey): Lomonosov Moscow State University

Ekonomicheskaya Politika / Economic Policy, 2023, vol. 3, 46 - 81

Abstract: The energy crises during 2021 and 2022 in the USA and EU have shown that technological transformation can have negative consequences for the electric power industry by causing power outages and sharp fluctuations in market prices. This prompted the authors to determine the role of institutions in overcoming problems in intra-sectoral coordination. After clustering the electric power industry’s alternatives for institutional organization in different countries using OECD data and Ward's method, the conclusion is that, in addition to economic and technological factors, the characteristics of social orders (as outlined by D. North et al.) influence the choice of a regulatory model. Moreover, after comparing the results of clustering with the dynamics of investment in the industry and of electricity prices, the authors maintain that these factors are significantly correlated with institutional organization. Therefore, management alternatives for ensuring stable electricity prices and incentives for investment in the industry should take into account not only economic and technological factors but also the social order established in the country.

Keywords: electric power industry; transactions governance mechanisms; social order; clustering; public efficiency. (search for similar items in EconPapers)
JEL-codes: B52 L22 L42 (search for similar items in EconPapers)
Date: 2023
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