Markets and regulation

Abstract

Reliance on market mechanisms and decentralized decisions as alternatives to central planning and government regulation of energy and other critical infrastructure enterprises has gained momentum worldwide over the last decade. This trend has been seen as the sale of government owned and operated monopolies in energy (electricity, gas and oil), in water and in public transportation. In nations such as the United States where independent ownership was frequently the case, increased dependence on market mechanism is replacing governmental price regulation in these same industries. Whether under the title of privatization, deregulation or restructuring, the movement has been toward allowing competitive market forces to set prices for essential commodities that in the past were actively controlled through direct government ownership or regulation. Within the US there is increased pressure for reregulation of the commodities and for regulation of the derivative markets that have been established to hedge commodity price volatility.