Market Failure in Public Utility Industries: An Institutionalist Critique of Deregulation

There is a general consensus that public utility services are an integral part of the infrastructure of modern society. Typically, these services are provided by capital intensive networks that link centralized supply with a wide range of diverse customer classes—ranging from residential to large industrial customers in both urban and rural settings. These networks constitute the platforms that support all sectors of the economy and contribute to the productivity gains and income growth of those using the networks. In addition, when successful these network platforms facilitate the expansion of markets, thereby further increasing productivity, wealth, and the attainment of social goals.