The role of technological and market structure in regulatory reform

This article considers the role of technological and market structure in determining whether regulatory reform is desirable, and the nature of reform that might be undertaken to improve resource allocation. The article discusses the basis for government intervention in an industry, the role of "natural monopoly," and alternative approaches that might be employed to introduce competition for a market even if competition within a market is not possible (e.g., through competitive auctions, contestability, or monopolistic competition). It suggests the nature of the economic basis for regulatory reform in a number of American industries in recent years.