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Home » Library » Discussion Papers » DP0804 Did early utility regulation work? An investigation of British railway regulation prior to the First World War

Abstract: It is commonplace to imagine that state-regulated private provision of utilities is a modern phenomenon. This is not so: Victorian Britain had publicly-regulated privately owned railway companies. Maximum passenger and increasingly freight charges were set in law, in a system resembling the modern “RPI-X” approach used in British utility sector regulation today. We investigate the effects on railway company performance prior to the First World War. We find that regulation was somewhat effective, particularly after 1893 when price controls became more onerous. Nevertheless, the absence of periodic franchising allowed poor performance to persist for longer than would be tolerated today.

Full paper (pdf): DP0804 Did early utility regulation work? An investigation of British railway regulation prior to the first world war

Tim Leunig (LSE) and Nicholas Crafts (Warwick)