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 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.

Determining the contribution of technical change, efficiency change and scale change to productivity growth in the privatized English and Welsh water and sewerage industry:1985-2000

The water and sewerage industry of England and Wales was privatized in 1989 and subjected to a new regime of environmental, water quality and RPI+K price cap regulation. This paper estimates a quality-adjusted input distance function, with stochastic frontier techniques in order to estimate productivity growth rates for the period 1985-2000. Productivity is decomposed so as to account for the impact of technical change, efficiency change, and scale change. Compared with earlier studies by Saal and Parker [(2000) Managerial Decision Econ 21(6):253-268, (2001) J Regul Econ 20(1): 61-90], these estimates allow a more careful consideration of how and whether privatization and the new regulatory regime affected productivity growth in the industry. Strikingly, they suggest that while technical change improved after privatization, productivity growth did not improve, and this was attributable to efficiency losses as firms appear to have struggled to keep up with technical advances after privatization. Moreover, the results also suggest that the excessive scale of the WaSCs contributed negatively to productivity growth. © 2007 Springer Science+Business Media, LLC.

Productivity and price performance in the privatized water and sewerage companies of England and Wales

After its privatization in 1989, the water and sewerage industry of England and Wales faced a new regulatory régime and implemented a substantial capital investment program aimed at improving water and environmental standards. A new RPI + K regulatory pricing system was designed to compensate the industry for its increased capital costs, encourage increased efficiency, and maintain fair prices for customers. This paper evaluates how successful privatization and the resulting system of economic regulation has been. Estimates of productivity growth, derived with quality adjusted output indices, suggest that despite reductions in labor usage, total factor productivity growth has not improved since privatization. Moreover, total price performance indices reveal that increases in output prices have outstripped increases in input costs, a trend which is largely responsible for the increase in economic profits that has occurred since privatization. * We would like to thank Emmanuel Thanassoulis, Joshy Easaw, Jim Love, John Sawkins, and an anonymous referee for helpful comments on earlier drafts of this paper. The usual disclaimer applies.

Investigating the supply and demand relationship in a profession: the English and Welsh schools of librarianship and information Studies and the Higher Education Library and Information Services employment sector in England and Wales.

Concern has been expressed in the professional literature - borne out by professional experience and observation - that the supply and demand relationship existing between the 13 English and Welsh Library and Information Studies (LIS) Schools (as providers of `First Professional' staff) and the Higher Education Library and Information Services (HE LIS) sector of England and Wales (as one group of employers of such staff) is unsatisfactory and needs attention. An appropriate methodology to investigate this problem was devised. A basic content analysis of Schools' curricular and recruitment material intended for public consumption was undertaken to establish an overview of the LIS initial professional education system in England and Wales, and to identify and analyse any covert messages imparted to readers. This was followed by a mix of Main Questionnaires and Semi-Structured Interviews with appropriate populations. The investigation revealed some serious areas of dissatisfaction by the HE LIS Chiefs with the role and function of the Schools. Considerable divergence of views emerged on the state of the working relationships between the two sectors and on the Schools' successes in meeting the needs of the HE LIS sector and on CPD provision. There were, however, areas of substantial and consistent agreement between the two sectors. The main implications of the findings were that those areas encompassing divergence of views were worrying and needed addressing by both sides. Possible ways forward included recommendations on improving the image of the profession purveyed by the Schools; the forming of closer and more effective inter-sectoral relationships; recognising fully the importance of `practicum' and increasing and sustaining the network of `practicum' providers.

Trade union policy and new technology: the Civil and Public Services Association

The introduction of a micro-electronic based technology to the workplace has had a far reaching and widespread effect on the numbers and content of jobs. The importance of the implications of new technology were recognised by the trade unions, leading to a plethora of advice and literature in the late 70s and early 80s, notably the TUC 'Technology and Employment ' report. However, studies into the union response have consistently found an overall lack of influence by unions in the introduction of technology. Whilst the advent of new technology has coincided with an industrial relations climate of unprecedented hostility to union activity in the post-war period, there are structural weaknesses in unions in coming to terms with the process of technological change. In particular was the identification of a lack of suitable technological expertise. Addressing itself to this perceived weakness of the union response, this thesis is the outcome of a collaborative project between a national union and an academic institution. The thesis is based on detailed case studies concerning technology bargaining in the Civil Service and the response of the Civil and Public Services Associations (CPSA), the union that represents lower grade white collar civil servants. It is demonstrated that the application of expertise to union negotiators is insufficient on its own to extend union influence and that for unions to effectively come to terms with technology and influence its development requires a re-assessment across all spheres of union activity. It is suggested that this has repercussions for not only the internal organisation and quality of union policy formation and the extent, form and nature of collective bargaining with employer representatives, but also in the relationship with consumer and interest groups outside the traditional collective bargaining forum. Three policy options are developed in the thesis with the 'adversarial' and 'co~operative' options representing the more traditional reactive and passive forms of involvement. These are contrasted with an 'independent participative' form of involvement which was a 'pro-active' policy option and utilised the expertise of the Author in the CPSA's response to technological change.

Market orientation of hotels and travel services in China

China is unique both politically and economically. How this uniqueness impacts on firms'' adoption of market orientation and the impact of market orientation on business performance, however, remain unclear. This book reports a study by Dr Riliang Qu who aims to address the above knowledge void. The study employs a two-stage research strategy including interviews and a survey of 1000 hotels and travel services. The study found that government regulations restricting the firm rivalry and the shortage of competent managerial talents are among the most serious constraints to the firms'' development of market orientation along with such factors as inadequacy of government regulation on product quality and consumer protection. The findings suggest that in transitional like China, government actions could be a major force behind firms'' aspiration of being market-oriented. The study also found that the benefits of market orientation are multi-fold in that it not only improves company''s business performance but also has positive effects on customer satisfaction/retention, power in distribution channel, and corporate social responsibility.