Institutional change and continuity in German infrastructure management: The case of electricity reform

Abstract

Following the example of telecommunications, German electricity markets were completely liberalised in April 1998. Do these developments signal the erosion of the traditional model of infrastructure management and, thus, of one pillar of the German political economy? The article addresses the issue of change or continuity from a neo‐institutionalist perspective, using electricity reform as a case study. After mapping out the pre‐reform system and the forces driving liberalisation, the article first discusses current market dynamics and sectoral adjustments, and then describes and assesses the regulatory regime installed after liberalisation. We observe substantial changes in strategic orientations of market actors in response to the new policy environment of market opening. However, we find strong continuity of political and regulatory management structures. The persistance of regulatory patterns can be attributed to the weight of core macro‐level institutions of the German political system in which sector‐level regimes are embedded.

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