the privatization of electricity distribution in turkey a legal and economic analysis this paper analyzes the recent regulatory reform in the turkish electricity distribution market from a legal and economic perspective we highlight tensions between the judiciary politicians and bureaucracy and discuss their economic consequences the paper engages in a discussion of economic consequences of legal procedures we stress interactions between legal decisions and economic institutions the historical positions of the constitutional court and danistay council of state on privatizations have been ambivalent and it is hard to qualify them as an incentive for privatization and reform despite some recent liberal decisions we address reasons behind their decisions and offer some suggestions toward improving the privatization process

potential impacts of electricity price changes on price formation in the economy a social accounting matrix price modeling analysis for turkey recent reforms in the turkish electricity sector since 2001 aim to introduce a tariff system that reflects costs this is expected to affect the production and consumer prices of electricity the changes in electricity prices are then reflected in production costs in other segments of the economy subsequently producer and consumer prices will be affected the potential impact of the changes in electricity prices that the ongoing electricity reforms in turkey will bring about may have important implications on the price formation in economic activities and the cost of living for households this paper evaluates the potential impacts of changes in electricity prices from a social accounting matrix sam price modeling perspective it is found that based on the estimated price multipliers that prices in the energy producing sectors mining and iron and steel manufacturing sectors would be affected more severely than the remaining sectors of the economy consumer prices are affected slightly less than producer prices

an evaluation of the transitional turkish electricity balancing and settlement market lessons for the future balancing and settlement market is a crucial part of restructured turkish electricity market in this framework the main purpose of this study is to examine whether the prices constituted in the transitional balancing and settlement market reflect the real cost of imbalances although it is observed that the prices are not powerful in indicating the real cost of imbalances turkey has the opportunity to form a well functioning market within the context of planned new market structure turkey needs to define a proper roadmap reckoning the points mentioned in this paper to be able to achieve her objectives

rent dissipation through electricity prices of publicly owned utilities a public choice model is presented in order to explain the fact that publicly owned electricity utilities rarely price at marginal cost in practice it is shown that if i government revenues are raised through proportional taxes ii median income is less than mean income and iii the share of a consumer s spending on electricity decreases with income then the price resulting from a majority rule and universal voting is below marginal cost the determination of a fixed subscription fee is also considered empirical evidence of our results is obtained from pricing and consumption data for hydro qu6bec

exploring the options for carbon dioxide mitigation in turkish electric power industry system dynamics approach electric power industry has a huge carbon mitigation potential fundamentally because there are large carbon free renewable resource options in turkey with growing demand in electricity consumption and incentives offered for natural gas fired electricity generation co2 emissions sourced from electric power industry had tripled over the last two decades current governmental strategy focuses on energy security and resource diversity in a growing economy and does not articulate sufficient mitigation targets and appropriate regulations in this research an original dynamic simulation model is built validated and analyzed to explore the options for carbon mitigation in turkish electric power industry model structure represents the investment dispatch and pricing heuristics as well as the natural resource base of electricity generation in turkey it operates on annual basis over 30 years to simulate installed capacities and generations of power plants with alternative resources and their resulting co2 emissions the analysis presented in this paper reveals that there are mitigation options below 50 of business as usual growth with common policy options such as feed in tariffs investment subsidies and carbon taxes the model can serve as an experimental platform for further analysis of problems related to carbon mitigation in turkish electricity sector

testing hypotheses about firm behavior in the cigarette industry data on the effects of excise taxes are used to investigate the level of competition in the cigarette industry a lower bound on the numbers equivalent of firms in the context of the conjectural variations model is derived and estimated results point to at least a moderately high level of competition and in particular allow for the rejection of the perfect cartel model this paper relies on comparative statics results and hence circumvents recent criticisms of a study of monopoly behavior in the cigarette industry

measurement of monopoly behavior an application to the cigarette industry a simple scheme is proposed to measure monopoly pricing behavior the coefficient of the tax rate term in a price equation identifies the ratio of price to marginal cost no direct measurement of costs is required so a major problem for other empirical studies of monopoly is avoided empirical results for cross section time series data support rejection of atomistic competition but also provide evidence against the operation of an effective cartel in the cigarette industry the model represents an alternative interpretation of related results in a recent paper by barzel application of the methodology to other markets is feasible

analysing success of regulatory policy transfers evidence from turkish energy markets abstract economic regulation of public utilities has become a worldwide phenomenon with the preceding privatisation stream it is questionable to transfer regulatory models hastily without customising the policy options or introducing necessary institutional reforms enabling the achievement of expected results of regulatory reform institutional configuration of a country affects credibility of regulatory commitments quality of regulatory design and way of policy transfer turkey s energy market regulation experience confirms the decisive role of institutions in shaping the regulatory framework

can law impose competition a critical discussion and evidence from the turkish electricity generation market electricity markets have undergone regulatory reforms since the early 1980s around the world technical analyses of these reforms usually pay lip service to the influence of politics over regulatory processes existing studies examine certain aspects of the market such as demand pricing and efficiency and they touch upon political issues only passingly when economic models cannot provide sufficient explanation this approach problematically takes politics as an ad hoc variable this study shows that electricity is intrinsically a political good and argues that any meaningful reform effort should take institutions as the starting point rather than a residual the argument that politics has to be an endogenous variable in any model aspiring to explain behavior in electricity markets is demonstrated in the paper the evidence for the political good character of electricity is found by examining the turkish regulatory reform for which it is argued that there is not a satisfactory relationship between expected and realized gains

electricity restructuring in turkey abstract turkey implemented the electricity sector reform by which the electricity market law no 4628 passed in february 2001 recently all segments of the turkish electricity sector are dominated by a vertically integrated public owned monopoly turkiye elektrik kurumu the turkish electricity institution the turkish electricity reform involves vertical deintegration of generation transmission and distribution introduction of competition into generation and retail sale establishment of an independent regulatory authority and privatization of public generation and distribution entities this article provides an overview of the turkish electricity sector reform and defines some problems that may affect the reform success

the reform in the turkish natural gas market a critical evaluation turkey is in a strategically advantageous position in terms of its natural gas market being in the middle of europe and energy rich countries of central asia it can be an energy corridor between these two regions it can import gas from a number of countries and diversify its sources this situation may also provide motivation for a competitive gas market the recent reform in the market which began in 2001 was an attempt to strengthen the natural gas market to this end however the reform has not worked out as expected so far this article discusses recent restructuring efforts in the turkish natural gas market we focus on the legal structure and economic consequences of the legal change within the international economic relations after presenting a detailed discussion of the legal framework we draw attention to the problems of the industry and difficulties in the transition to a more competitive market structure in the end we touch upon some regulatory issues and potential conflicts

regulatory reform in turkish energy industry an analysis the republic of turkey has initiated an ambitious reform program in the most important segments of her energy market which requires privatization liberalization as well as a radical restructuring of these industries however there is no consensus that the measures introduced are optimal the present article attempts first to evaluate the regulatory framework created by the laws of 2001 in terms of economic efficiency considerations and second to determine what still needs to be done to improve the current situation the paper not only provides an analysis of these reforms but also lists some policy suggestions the study concludes that despite relatively good legislative framework in practice the reforms in turkey are far from ideal as they are mainly in the form of textbook reforms and therefore a significant amount of work still lies ahead of turkey to set up a fully fledged energy market

political institutions of electricity regulation the case of turkey abstract turkey has been going through a liberalization process in its electricity market over the last decade so far the regulatory content of the market reforms has been in the center of attention in the literature to the negligence of regulatory governance however recent studies which applied the theoretical insights of new institutional economics to utilities regulation have demonstrated that political endowments of the country draw the boundaries to which extent such regulatory content can be effectively implemented in line with these studies this paper adopts an institutional approach and attempts to identify the political endowments of turkey in order to further analyze whether the market reforms succeeded in bringing about sufficient checks to cure the institutional problems in other words the paper takes a picture of the overall regulatory arena the results show that the current regulatory structure especially government regulator relations yet fails to meet good regulatory governance criteria the paper also provides some policy suggestions

electricity demand of manufacturing sector in turkey a translog cost approach abstract this paper models factor demand for manufacturing sector in turkey we estimated a translog cost function with four factor consist of capital labor intermediate input and electricity over the 1980 2001 our objective taking in the consideration electricity as production input was twofold on the one hand to estimate the price elasticity of electricity demand in manufacturing sector and on the other hand to use cross price and morishima elasticities of substitution results for structural analysis regarding effects of electricity liberalization which initiated in 2001 empirical result shows that electricity demand is relatively price sensitive 0 85 our result in terms of electricity price is consistent with the previous studies while electricity labor and electricity capital inputs are complementary results indicate the existence of substitution possibilities between electricity and intermediate input this means that changes in electricity prices have impact on labor demand and investment demand these results have important implications for public policy

the politics of regulation in the turkish electricity market abstract turkey began reforming the electricity market in 2001 the regulatory reform aimed to liberalize the market however the institutional and political structure was not ready for creating an efficiently working competition the independent regulator did not have both experience and will to direct the industry to a more competitive environment currently the reform has slowed down and political preferences drive the industry this paper studies the reasons for the slowdown in the reform efforts by focusing on the relationships between the government judiciary and the independent regulator we conclude that strategic behaviors of players in the market including the judiciary the government and the regulator have made the introduction of competition to the market more costly

on the electricity shortage price and electricity theft nexus abstract pakistan is facing severe electricity shortfall of its history since 2006 several measures have been implemented in order to mitigate electricity shortage the focus has been on raising the installed capacity of electricity generation and transmission the present policy results in expensive thermal electricity generation mostly using expensive and environmentally hazardous furnace oil and inability of utilities to recover their cost of supply although there is unprecedented rise in electricity tariffs this study concentrates on the electricity demand and traces the relationship between electricity shortfalls tariff rate and electricity theft in the background of recent electricity crisis using the data for the period 1985 2010 we employed the granger causality test through error correction model and out of sample causality through variance decomposition method empirical evidence shows that electricity theft greatly influences electricity shortfalls through lowering investment and inefficient use of electricity the study concludes that electricity crisis cannot be handled without combating rampant electricity theft in the country

firm behavior in a market with addiction the case of cigarettes abstract this paper investigates firm behavior when demand is linked over time among other things the theoretical section shows that if firms are forward looking anticipated future events can affect current consumption of an addictive good even when consumers are completely myopic the empirical part of the paper reports a simulation of the 1983 federal cigarette excise tax increase both myopic and rational models of consumer demand give roughly the same predictions for per capita consumption but neither model does very well predicting actual consumption the problem appears to lie in the prediction of price suggesting that supply considerations are important

improving electricity efficiency in turkey by addressing illegal electricity consumption a governance approach abstract recent reform activities to liberate and privatize the turkish utility energy sector through deregulation have transformed the scope of the historically government owned corporations however during the free market process approach power theft has become an issue that requires national attention this paper examines the current use of two governance tools privatization and regulation and suggests two others to promote a framework of efficient electricity distribution grants and public information the capacity of the tools to provide a solution to power losses is discussed while considering the barrier of political acceptability in regions of the country where pockets of resistance exist

cost function estimates scale economies and technological progress in the turkish electricity generation sector abstract turkish electricity sector has undergone significant institutional changes since 1984 the recent developments since 2001 including the setting up of a regulatory agency to undertake the regulation of the sector and increasing participation of private investors in the field of electricity generation are of special interest this paper estimates cost functions and investigates the degree of scale economies overinvestment and technological progress in the turkish electricity generation sector for the period 1984 2006 using long run and short run translog cost functions estimations were done for six groups of firms public and private the results indicate existence of scale economies throughout the period of analysis hence declining long run average costs the paper finds empirical support for the averch johnson effect until 2001 i e firms overinvested in an environment where there are excess returns to capital but this effect was reduced largely after 2002 technological progress deteriorated slightly from 1984 1993 to 1994 2001 but improved after 2002 overall the paper found that regulation of the market under the newly established regulating agency after 2002 was effective and there are potential gains from such regulation

risk asset pricing and monetary policy transmission in europe evidence from a threshold var approach abstract this paper investigates in how far monetary policy shocks impact european asset markets conditional on different risk states we distinguish between macroeconomic risk economic policy risk and financial risk and separately extract three factors via principal component analysis from a set of candidate variables these factors augment a threshold vectorautoregressive model that contains assets and a short rate impulse responses show that we indeed see state dependency in the reaction of asset prices to monetary policy shocks this indicates that asset markets distinguish between different types and states of risk investment grade corporate bond yields show the most pronounced state dependency if we distinguish between states of high and low economic policy risk non investment grade corporate bond yields as well as equity of industrial firms face the strongest state dependency for macroeconomic risk financial equity shows state dependency for financial risk regimes further on we illustrate that during periods of severe crisis different risk regimes coincide this impedes a clear delimitation among these three types of risk as a consequence of our findings monetary policy transmission via distinct asset prices highly depends on the degree of these different kinds of risk inherent in europe

institutions and commitment the thrust of this paper is that to understand the roles institutions play in society a deep analysis of opportunism and its implications is necessary for that purpose a transactions costs cum positive political theory approach is developed with a focus on the role of institutions and their implications for regulatory commitment a major issue is restraining political opportunism countries that have succeeded in developing a healthy private sector are those that have developed institutions that restrain governmental decision making but such restraining is itself a political choice countries with electoral and legislative systems that bring about decentralized government have stronger chances of developing equilibria where government discretion is restrained copyright 1996 by oxford university press