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An Evaluation on the Efficacy of the Competition Policy in Korean Gas Industry - From the Perspective of Meta Error in Policy Problem Definition-

  • Journal of Regulation Studies
  • 2013, 22(2), pp.183-224
  • Publisher : 한국규제학회
  • Research Area : Social Science > Public Administration

이성우 1 Kim, kwon-sik 2

1한양대학교
2수원대학교

Accredited

ABSTRACT

A natural gas industry tends to take a form of monopolized market. Korean gas market has also been governed by government regulation and government enterprise Kogas since its early start. A monopolized industry generally causes an X-inefficiency phenomena, theoretically and practically, The Korean regulatory agency, Ministry of Knowledge Economy, has tried to resolve these kinds of inefficiency and ineffectiveness by instituting some type of competition policy into gas market. This paper argues that government's recent attempts of instituting a more competitive gas market have a wrong definition of policy problem. This paper also argues that the introduction of competition policy can hardly achieve the intended policy objective of efficient operation of gas industry. This paper suggests the institutionalization of incentive regulation such as price cap regulation, RPI-X or profit sharing regulation as viable policy options to make the workably competitive or contestable gas market and to raise the industry efficiency.

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