In this module we have distinguished between privatisation, deregulation and liberalisation. It should be understood that these are not mutually exclusive categories. Some changes embody elements of all three, for example, the privatisation of National Bus Company subsidiaries was accompanied by deregulation (the removal of controls not related to safety) and liberalisation (the opening of the market to new entrants).
The forces which have produced economic deregulation and liberalisation have not, however, resulted in a move away from regulation in all its forms. On the contrary, we have seen in the UK how new regulatory agencies have been created to cope with the privatised natural monopolies. Further, the social and environmental regulation discussed in Module 4 has not diminished in recent years and may even be expected to increase in response to political pressures.
The general issue discussed in this and earlier modules concerns the complex problem of the choice of institutional structure. Market contracts, competitive franchising, bureaucratic supply, public enterprise and regulatory control represent different and contrasting means of conducting economic transactions. Institutional structures will always be the subject of constant change and experiment, reflecting the changing perceptions both of those affected by them and those who their actions are designed to protect, and all of them seek, if possible, to ‘better their condition’ (Smith 1976).
