Introduction to the economics of public services regulation
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Introduction to the economics of public services regulation

A smooth introduction to the complex theory and practice of the regulation of public services
4.4 (38 ratings)
Instead of using a simple lifetime average, Udemy calculates a course's star rating by considering a number of different factors such as the number of ratings, the age of ratings, and the likelihood of fraudulent ratings.
104 students enrolled
Created by Antonio Estache
Last updated 10/2016
English
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Current price: $10 Original price: $80 Discount: 88% off
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Includes:
  • 8 hours on-demand video
  • Full lifetime access
  • Access on mobile and TV
  • Certificate of Completion
What Will I Learn?
  • Understand WHY key essential public services need some regulatory supervision
  • Learn HOW to think through the regulatory needs as an economist
  • Have a good sense of HOW to regulate WHAT and WHEN
  • Learn the core dimensions of the basic ECONOMIC TOOLS of regulation as they are used in the real world when regulation is taken seriously by the authorities
View Curriculum
Requirements
  • Solid knowledge of monopoly theory from basic microeconomics classes. It is at the core of everything you will see in this course.
  • For some of the readings, you need to know how to set up an optimization problem under constraint.
  • You also need to be able to have a sense of synthesis since we will cover a lot.
Description

This course focuses on how best to regulate (public or private) firms responsible for the delivery of what are commonly viewed as public services in the context in which the service providers enjoy significant market power. The lectures get into both the theory and the practice of regulation. The main illustrations of the concepts are from the infrastructure industries (airports, energy, rail, roads, ports, telecoms, water and sanitation). These sectors represent investments and maintenance expenditures of 5-20% of GDP (depending on the level of development of the country) and are major contributors to the growth capacity of countries and of their competitiveness. . They also represent a very large share of the required spending of every household. The poorer the household, often, the higher the share it needs to spend on these public services. Finally, because of the high amounts invested in the sector and the large size of many of the projects required, these services are quite exposed to corruption risks. This is why these services are so politically sensitive and why governments, non-governmental organization and other stakeholders spend a lot of energy debating how best to regulate them.. By the end of the class, you will see that the key issues you’ll learn are representative of many of the trade-offs covered in the ongoing policy debates and you should be able to develop your own view on what desirable regulatory policies and institutions should be in public services, and probably more generally.

Who is the target audience?
  • Economics students (3rd years BA and, as a complement to more technical classes 1st year MA), Public policy students
  • Regulators and their advisors
  • NGOs
  • Regulated firms
  • Concerned residential and non-residential consumers
  • Members of regional, national and supranational parliaments
  • Economics students
  • Public policy students
  • Project finance specialists concerned with regulatory issues
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Curriculum For This Course
69 Lectures
08:05:04
+
Setting the stages
7 Lectures 51:12



A first look at the regulation on monopolies
09:08

How to assess the size of the problem a regulator faces?
04:57

Stéphane Saussier - About deadweight loss
06:30

On the diversity and evolution of the theory of regulation
07:06

- The definition, and the evolution of regulation theory and practice
- A reminder of the basic theory on monopolies
- How to assess the size of the problem a regulator faces?

Module 1
10 questions
+
Insights on monopolies to set up their regulation
7 Lectures 59:56
Overview
02:31

Getting progressively closer to real life
17:35

The game of regulation
06:20

Jose-Antonio Gomez-Ibanez - About the regulatory game
05:37

Some math to get some useful rules of thumbs
04:25

Math Insight : Deriving the Lerner index (or Inverse elasticity rule)
02:23

How to start thinking about the design of regulation in details?
21:05

- The relevance of information and institutional distortions

- Regulation as a game

- Some useful rules of thumbs

Module 2
10 questions
+
Regulating monopolies with and without information gaps
11 Lectures 01:06:23
Overview
02:53

Brief reminder of key concepts
05:09

What are some main changes in the design of regulation brought about by the uise of agency models?

David Martimort - About agency theories
04:19

Optimal regulation under full information
07:39

Optimal regulation when regulators are uncertain about costs
05:05

What are the practical aspects of how regulation has evolved to minimize the consequences of the asymmetry of information between the utility regulator and the companies it regulates?

Phil Burns - About regulatory practice
08:07

Why imperfect costs information makes regulation imperfect?
05:10

A first look at regulation in practice
08:22

Math Insight : Computing the Rate of Return (RoR)
04:46

Impact of information asymmetry on optimal regulatory choice
09:49

Math Insight : The drivers of regulatory options
05:04

- Designing regulation with and without transparent information

- On the impact of information asymmetries

- On the optimal choice of instruments under information asymmetries

Module 3
10 questions
+
Designing a regulation matching the institutional capacity of a country/sector
10 Lectures 01:05:06
Overview
03:02

What if the government or regulator is not benevolent?
19:08

How big of a problem is corruption in the context of regulation of public services and what are its main consequences in practice?

Tina Soreide - About corruption
04:27

What to do in case of non-benevolence?
11:14

What do we know about the importance and effectiveness of the independence of regulatory agencies?

Francesc Trillas - About regulatory institutions
06:08

Limited regulatory/Technical capacity
04:32

Limited commitment capacity
05:17

Limited accountability
04:11

Limited fiscal capacity
03:09

Summing up and comparing optimal solutions
03:58

- What happens when the government/regulator is NOT benevolent
- The various sources of non-benevolence 
- What to do in case of non-benevolence

Module 4
10 questions
+
An insight into the real world practice regulation
6 Lectures 47:11
Overview
02:01

Moving from theory to practice
05:24

Putting real numbers on concpets
13:34

The key formula in the regulation of public service operators
13:05

How is financial modeling used in practice in regulated industries?

Richard Schlirf - About the finances of regulation
05:18

Financial modeling and the coherence of regulation
07:49

- From theory to practice

- The key formulas in applied regulation and their use

- The relevance of the finance dimensions of regulation 

Module 5
10 questions
+
Details on pricing techniques
11 Lectures 01:04:05
Overview
01:40

Policy trade-offs and pricing techniques choices
04:16

How does price discrimination work in practice?

Claude Crampes - About price discrimination
08:31

Pricing in practice
06:17

First-degree price discrimination
04:05

Second-degree price discrimination
09:30

Math Insight : Two-part tariffs
06:25

Math Insight : Pricing in segmentable markets (1) - Energy
08:41

Third-degree price discrimination
07:02

Math Insight : Pricing in segmentable markets (2) - The rules of Thumb
03:28

Final comments on pricing techniques
04:10

- From theory to practice

- The key formulas in applied regulation and their use

- The relevance of the finance dimensions of regulation

Module 6
10 questions
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Pricing when regulators care about more than costs and price discrimination
9 Lectures 59:27
Overview
02:37

Pricing access to networks ton interconnected firms
07:07

How are the consumers be penalised by the use of price discrimination techniques in telecoms?

Tommaso Valletti - About consumer losses from pricing
09:03

Dealing with social concerns in regulation
09:59

Dealing with quality in regulation
11:44

Math Insight : Regulating quality
03:30

Dealing with multiple dimensions of quality in regulation
04:41

Institutional constraints on the regulation of quality
05:07

Fitting quality into the allowed regulated average price
05:39

- The relevance of networks dimensions

- The concerns for quality

- The social concerns

Module 7
10 questions
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Regulation in the context of the privatization of public services
8 Lectures 01:11:44
Overview
01:42

How big of a problem is contract renegociation?

Jose-Luis Guasch - About renegociation
07:32

About the link between regulation and privatization
05:14

What does theory tell us about the optimal distribution, between the public and the private sector, of the responsability for financing public services?

Emmanuelle Auriol - About public vs private financing
05:11

About the promises of the privatization
22:08

About how regulation fits into project finance in practice
11:03

About how regulation could fit into project finance in practice
09:44

About the futur of public-private partnerships and their regulation
09:10

- Regulation and privatization

- Project finance

- Regulation in the context of project finance

Module 8
10 questions
About the Instructor
Antonio Estache
4.4 Average rating
38 Reviews
104 Students
1 Course
Professor of Economics at the Université Libre de Bruxelles

I am a professor of Economics at the Université libre de Bruxelles. I teach regulatory economics, public economics and environmental economics. Before becoming a professor, I worked for 25 years at the World Bank and in that context I helped set up regulatory agencies and design the regulation of key public services