The comparative impact of privatisation and regulation on productivity growth in the English and Welsh water and sewerage industry, 1985-99

After the 10 regional water authorities of England and Wales were privatized in November 1989, the successor WASCs (water and sewerage companies) faced a new regulatory regime that was designed to promote productivity growth while simultaneously improving drinking water and environmental quality. As legally mandated quality improvements necessitated a costly capital investment programme, the industry's economic regulator – the Office of Water Services – implemented a RPI + K pricing system, designed to compensate the WASCs for their capital investment programme while also encouraging faster rates of productivity growth. This paper considers the relative effects of privatization and regulation on productivity growth in the industry using both non-parametric and parametric methods to provide a crosscheck on the robustness of the results. While there is evidence that labour productivity improved after privatization, there is no evidence that privatization led to a growth in TFP (total factor productivity). However, there is some evidence of a small increase in the rate of TFP growth in the aftermath of a substantial tightening of the regulatory regime that took place in 1995. These results, therefore, are consistent with evidence from other research that privatization, in the absence of effective competition and/or regulation, is not necessarily associated with improved economic performance.

The impact of information and communication technology (ICT), education and regulation on economic freedom in Islamic Middle Eastern countries

Our study investigated the impact of ICT expansion on economic freedom in the Middle East (Bahrain, Iran, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Syria, United Arab Emirates, and Yemen). Our empirical analysis used archival data from 1995 to 2005; it showed that ICT expansion in the Middle East has been effective both in bridging the digital divide and also in promoting economic freedom in a region that was vulnerable to political, social, and global conflict. However, differences between countries, such as the educational attainment of their citizens and institutional resistance to technology acceptance, both enhanced and restricted the relationship between ICT and economic freedom.

Innovation in the pharmaceutical industry:a study of the effects of regulation on the U.K. pharmaceutical industry

A history of government drug regulation and the relationship between the pharmaceutical companies in the U.K. and the licensing authority is outlined. Phases of regulatory stringency are identified with the formation of the Committees on Safety of Drugs and Medicines viewed as watersheds. A study of the impact of government regulation on industrial R&D activities focuses on the effects on the rate and direction of new product innovation. A literature review examines the decline in new chemical entity innovation. Regulations are cited as a major but not singular cause of the decline. Previous research attempting to determine the causes of such a decline on an empirical basis is given and the methodological problems associated with such research are identified. The U.K. owned sector of the British pharmaceutical industry is selected for a study employing a bottom-up approach allowing disaggregation of data. A historical background to the industry is provided, with each company analysed or a case study basis. Variations between companies regarding the policies adopted for R&D are emphasised. The process of drug innovation is described in order to determine possible indicators of the rate and direction of inventive and innovative activity. All possible indicators are considered and their suitability assessed. R&D expenditure data for the period 1960-1983 is subsequently presented as an input indicator. Intermediate output indicators are treated in a similar way and patent data are identified as a readily-available and useful source. The advantages and disadvantages of using such data are considered. Using interview material, patenting policies for most of the U.K. companies are described providing a background for a patent-based study. Sources of patent data are examined with an emphasis on computerised systems. A number of searches using a variety of sources are presented. Patent family size is examined as a possible indicator of an invention's relative importance. The patenting activity of the companies over the period 1960-1983 is given and the variation between companies is noted. The relationship between patent data and other indicators used is analysed using statistical methods resulting in an apparent lack of correlation. An alternative approach taking into account variations in company policy and phases in research activity indicates a stronger relationship between patenting activity, R&D Expenditure and NCE output over the period. The relationship is not apparent at an aggregated company level. Some evidence is presented for a relationship between phases of regulatory stringency, inventive and innovative activity but the importance of other factors is emphasised.

Self-regulation of health and safety in a Local Authority with particular reference to safety representatives, supervisors and safety committees

The Report of the Robens Committee (1972), the Health and Safety at Work Act (1974) and the Safety Representatives and Safety Committees Regulations (1977) provide the framework within which this study of certain aspects of health and safety is carried out. The philosophy of self-regulation is considered and its development is set within an historical and an industrial relations perspective. The research uses a case study approach to examine the effectiveness of self-regulation in health and safety in a public sector organisation. Within this approach, methodological triangulation employs the techniques of interviews, questionnaires, observation and documentary analysis. The work is based in four departments of a Scottish Local Authority and particular attention is given to three of the main 'agents' of self-regulation - safety representatives, supervisors and safety committees and their interactions, strategies and effectiveness. A behavioural approach is taken in considering the attitudes, values, motives and interactions of safety representatives and management. Major internal and external factors, which interact and which influence the effectiveness of joint self-regulation of health and safety, are identified. It is emphasised that an organisation cannot be studied without consideration of the context within which it operates both locally and in the wider environment. One of these factors, organisational structure, is described as bureaucratic and the model of a Representative Bureaucracy described by Gouldner (1954) is compared with findings from the present study. An attempt is made to ascertain how closely the Local Authority fits Gouldner's model. This research contributes both to knowledge and to theory in the subject area by providing an in-depth study of self-regulation in a public sector organisation, which when compared with such studies as those of Beaumont (1980, 1981, 1982) highlights some of the differences between the public and private sectors. Both empirical data and hypothetical models are used to provide description and explanation of the operation of the health and safety system in the Local Authority. As data were collected during a dynamic period in economic, political and social terms, the research discusses some of the effects of the current economic recession upon safety organisation.

Is a little sunshine all we need? On the impact of sunshine regulation on profits, productivity and prices in the Dutch drinking water sector

This paper analyzes the performance of Dutch drinking water utilities before and after the introduction of sunshine regulation, which involves publication of the performance of utilities but no formal price regulation. By decomposing profit change into its economic drivers, our results suggest that, in the Dutch political and institutional context, sunshine regulation was effective in improving the productivity of publicly organised services. Nevertheless, while sunshine regulation did bring about a moderate reduction in water prices, sustained and substantial economic profits suggest that it may not have the potential to fully align output prices with economic costs in the long run. In methodological terms, the DEA based profit decomposition is extended to robust and conditional non-parametric efficiency measures, so as to account better for both uncertainty and differences in operating environment between utilities.

Adolescent-parent disagreement on health-related quality of life of food-allergic adolescents:who makes the difference?

Background: Food-allergic adolescents are at highest risk for food allergy fatalities, which may be partly due to compromised self-management behavior. Such behavior may be negatively influenced by conflictual situations caused by adolescent–parent disagreement on the adolescent’s health-related quality of life (HRQL). Comparisons of adolescent-self-reported and parent-proxy-reported HRQL of food-allergic adolescents have never extensively been studied. The aims of this study were to investigate disagreement in adolescent-self-reports and parent-proxy-reports on the HRQL of food-allergic adolescents and to investigate the factors influencing adolescent–parent disagreement. Methods: Teenager Form (TF) and Parent Form (PFA) of the Food Allergy Quality of Life Questionnaire (FAQLQ), Food Allergy Independent Measure (FAIM), and Brief-Illness Perception Questionnaire (Brief-IPQ) were sent to food-allergic Dutch adolescents (13–17 years) and their parents. ICCs, t-tests, and Bland–Altman plots were used to investigate adolescent–parent disagreement. Participant characteristics, illness expectations, and illness perceptions influencing adolescent–parent disagreement were studied using regression analysis. Results: Seventy adolescent–parent pairs were included. There were a moderate correlation (ICC = 0.61, P < 0.001) and no significant difference (3.78 vs 3.56, P = 0.103) between adolescent-self-reported and parent-proxy-reported HRQL at group level. However, Bland–Altman plots showed relevant differences (exceeding the minimal important difference) for 63% of all adolescent–parent pairs. Adolescent’s age (>15 years), poorer adolescent-reported illness comprehension (Brief-IPQ-TF, coherence), and higher adolescent-reported perceived disease severity (Food Allergy Independent Measure-Teenager Form & -Parent Form) were associated with adolescent–parent disagreement. Conclusions: Adolescent–parent disagreement on the adolescent’s HRQL was mainly associated with adolescents’ rather than parents’ perceptions and characteristics. Illness comprehension of the adolescent may be an important target for intervention aimed at reducing adolescent–parent disagreement.

The impact of privatisation and regulation on the water and sewerage industry in England and Wales:a translog cost function approach

After the ten Regional Water Authorities (RWAs) of England and Wales were privatized in November 1989, the successor Water and Sewerage Companies (WASCs) faced a new regulatory regime that was designed to promote economic efficiency while simultaneously improving drinking water and environmental quality. As legally mandated quality improvements necessitated a costly capital investment programme, the industry's economic regulator, the Office of Water Services (Ofwat), implemented a retail price index (RPI)+K pricing system, which was designed to compensate the WASCs for their capital investment programme while also encouraging gains in economic efficiency. In order to analyse jointly the impact of privatization, as well as the impact of increasingly stringent economic and environmental regulation on the WASCs' economic performance, this paper estimates a translog multiple output cost function model for the period 1985–1999. Given the significant costs associated with water quality improvements, the model is augmented to include the impact of drinking water quality and environmental quality on total costs. The model is then employed to determine the extent of scale and scope economies in the water and sewerage industry, as well as the impact of privatization and economic regulation on economic efficiency.

The impact of organisational change on health care delivery to the adult mentally ill

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Influence of trade unions on health and safety at work

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Food colours:a study of the effects of regulation

In the 1960s the benefits of government regulation of technology were believed to outweigh any costs. But recent studies have claimed that regulation has negative effects on innovation, health and consumer choice. This case study on food colours examines such claims. EFFECTS ON HEALTH were measured by allocating a hazard rating to each colour. The negative list of 1925 removed three harmful colours which were rapidly replaced, so the benefits were short-lived. Had a proposed ban been adopted in the 1860s it would have prevented many years exposure to hazardous mineral colours. The positive list of 1957 reduced the proportion of harmful coal tar dyes from 54% of the total to 20%. Regulations brought a greater reduction in hazard levels than voluntary trade action. Delays in the introduction of a positive list created a significant hazard burden. EFFECTS ON INNOVATION were assessed from patents and discovery dates. Until the 1950s food colours were adopted from textile colours. The major period of innovation for coal tar colours was between 1856 and 1910, finishing well before regulations were made in 1957, so regulations cannot be blamed for the decline. Regulations appear to have spurred the development of at least one new coal tar dye, and many new plant colours, creating a new sector of the dye industry. EFFECTS ON CONSUMER CHOICE were assessed by case studies. Coloured milk, for example, was banned despite its popularity. Regulations have restricted choice, but have removed from the market foods that were nutritionally impoverished and poor value for money. Compositional regulations provided health protection because they reduced total exposure to colours from certain staple foods. Restricting colours to a smaller range of foods would be an effective way of coping with problems of quality and imperfect toxicological knowledge today.

Burden or benefit? Regulation as a dynamic influence on small business performance

This article contributes to contemporary debates concerning the impact of regulation on small business performance. Reassessing previous studies, we build our insights on their useful, but partial, approaches. Prior studies treat regulation principally as a static and negative influence, thereby neglecting the full range of regulatory effects on business performance. This study adopts a more nuanced approach, one informed by critical realism, that conceptualises social reality as stratified, and social causality in terms of the actions of human agents situated within particular social-structural contexts. We theorise regulation as a dynamic force, enabling as well as constraining performance, generating contradictory performance effects. Such regulatory effects flow directly from adaptations to regulation, and indirectly via relationships with the wide range of close and distant stakeholders with whom small businesses interact. Future research should examine these contradictory regulatory influences on small business performance.

Regulatory price performance, excess cost indexes and profitability:how effective is price cap regulation in the water industry?

In this study we apply an index number approach to allow for cross sectional comparisons of relative profitability, productivity and price performance of the regulated Water and Sewerage companies (WaSCs) in England and Wales during the years 1991-2008. In order to better analyse the impact of regulation on WaSC performance, we decompose actual economic profits into spatial multilateral Fisher productivity (TFP) index, the inverse of which is demonstrated to be a regulatory excess cost index that measures the deviation of a firm’s actual costs from benchmark costs, and a newly developed regulatory total price performance (TPP) index, which measures the excess of regulated revenues relative to benchmark costs. Increases (decreases) in regulatory price performance are indicative of the loosening (tightening) of price cap regulation. Moreover, we also show that the relationship between actual economic profitability, regulatory excess costs and regulatory price performance indices can be used to categorize regulatory price caps as “weak”, “powerful” or “catch-up promoting”. The results indicated that throughout the entire 1991-2008 period, price caps were never “powerful”, in the sense that they required less productive firms to immediately and fully catch-up to the most productive firm to regain economic profitability. More specifically, during the years 1991-2000 price caps were “weak” as prices were high enough for the firms to achieve economic profits despite their low productivity levels. However, after 2001 prices became “catch up promoting” as they required less productive companies to eliminate at least some excess costs in order to eliminate economic losses. Finally, we emphasize that as our results also clearly demonstrated a much closer alignment between allowed revenues and benchmark costs after 2001, Ofwat’s approach during this period was not only appropriate, but should also be continued in the 2009 price review.