The Quest for Coherence Between Institutions and Technologies in Infrastructures

Matthias Finger, J. Groenewegen and R. Künneke

Competition and Regulation in Network Industries, 2005, vol. 6, issue 4, 227-260

Abstract: This article elaborates on the possible interrelations between the technical and institutional coordination of infrastructures. There is indeed a need for coherence between both in order to safeguard a satisfactory functioning in terms of economic performance, guarantee of public values and technical system integrity. It is argued that the ongoing discussion on the liberalization of various infrastructures focuses very much on institutional changes, including market restructuring towards competition and privatization. The technical repercussions of these institutional changes are often neglected. On the other hand, technological change might also have very fundamental consequences for organizations and institutions. Building on the idea of a co-evolution between institutions and technologies, we define very simplified technical and institutional coordination mechanisms. By comparing both, we are able to determine their coherence and relate this to infrastructure performance. In this way, we provide a novel attempt to relate institutional arrangements to the technical network-specificities of infrastructures. This offers a different perspective on the organization of these sectors and a new explanation of their performance. We illustrate our arguments by way of cases from the electricity and air transport sectors. Implications for theory and policy conclude this article.

Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:sen:journl:v:6:i:4:y:2005:p:227-260

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