Rolf Künneke

The quest for coherence between institutions and technologies in infrastructures

This article elaborates on the possible interrelations between the technical and institutional coordination of infrastructures. There is indeed a need for coherence between both in order to safeguard a satisfactory functioning in terms of economic performance, guarantee of public values and technical system integrity. It is argued that the ongoing discussion on the liberalization of various infrastructures focuses very much on institutional changes, including market restructuring towards competition and privatization. The technical repercussions of these institutional changes are often neglected. On the other hand, technological change might also have very fundamental consequences for organizations and institutions. Building on the idea of a co-evolution between institutions and technologies, we define very simplified technical and institutional coordination mechanisms. By comparing both, we are able to determine their coherence and relate this to infrastructure performance. In this way, we provide a novel attempt to relate institutional arrangements to the technical network-specificities of infrastructures. This offers a different perspective on the organization of these sectors and a new explanation of their performance. We illustrate our arguments by way of cases from the electricity and air transport sectors. Implications for theory and policy conclude this article.

Electricity networks: how 'natural' is the monopoly?

Abstract This article deals with the changing economic characteristics of the electricity network. Traditionally, electricity networks are considered natural monopolies for various kinds of market failures coincide in this essential part of the electricity infrastructure. Technological induced complementarities between nodes and links are causing network externalities, economies of scale, a high degree of mono-functionality, collective good characteristics and an inherent tendency towards concentrated market structures. It is argued that recent technological trends imply a dramatic change of the network economics, leading to possibilities of inter- and intra-network competition, as well as inter fuel competition. The possible implications for the regulatory framework of this sector are addressed.

Convergence of Gas and Electricity Markets: Economic and Technological Drivers

This chapter identifies different economic and technological drivers for the convergence of gas and electricity markets in the context of the ongoing market restructuring (i.e., liberalization). The analysis is based on a description of the economic and technological features peculiar to the gas and electricity value chains, and four different categories of market convergence. Market convergence can be related to products and services, regulation, business governance, and technology. Some implications of convergence for the market structure, industrial organization, and regulation are discussed.

Mapping Institutional, Technological and Policy Configurations of Inverse Infrastructures

The notion of inverse infrastructures – that is, bottom-up, user-driven, self-organizing networks – gives us a fresh perspective on the omnipresent infrastructure systems that support our economy and structure our way of living. This fascinating book considers the emergence of inverse infrastructures as a new phenomenon that will have a vast impact on consumers, industry and policy. Using a wide range of theories, from institutional economics to complex adaptive systems, it explores the mechanisms and incentives for the rise of these alternatives to large-scale infrastructures and points to their potential disruptive effect on conventional markets and governance models.

Towards a typology of regulatory governance regimes in the liberalizing network industries

The purpose of this paper is to discuss various institutional arrangements in relation to different techno-economic conditions in network industries. We proceed along three steps: we first describe typical technological and economic configurations in the network industries that are related to essential technical functions. In a second step we summarize typical modes of organization that are applied in infrastructure reforms. The liberalization of infrastructures depends on the opportunities to configure these modes of organization for essential technical functions towards competition and private sector involvement. This approach allows us identifying different techno-economic configurations of infrastructures, and thus different institutional opportunities for liberalization that we describe as a third step. Depending on the political and economic systems, each of these institutional configurations can be addressed in different ways, allowing for different national styles of infrastructure reform.