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Midttun, Atle; Handeland, Joar; Omland, Terje --- "The Nordic Public Ownership Model Under Transition to Market Economy: The Case of Electricity" [2003] ELECD 48; in Glachant, Jean-Michael; Finon, Dominique (eds), "Competition in European Electricity Markets" (Edward Elgar Publishing, 2003)

Book Title: Competition in European Electricity Markets

Editor(s): Glachant, Jean-Michael; Finon, Dominique

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781843761785

Section: Chapter 6

Section Title: The Nordic Public Ownership Model Under Transition to Market Economy: The Case of Electricity

Author(s): Midttun, Atle; Handeland, Joar; Omland, Terje

Number of pages: 34

Extract:

6. The Nordic public ownership model
under transition to market
economy: the case of electricity
Atle Midttun, Joar Handeland and
Terje Omland

INTRODUCTION1

The Nordic/Scandinavian welfare state model has become well known as a
middle path between hierarchic planned economic and laissez-faire market
economy. Its supporters argue that the active, but pragmatic public engage-
ment by the Nordic public authorities in the economy avoids the stiffness
of the former East European planned economy models, while at the same
time softening the harsh distributive outcomes of free-trade markets
(Katzenstein, 1985; Mjøset, 1989; Nielsen and Pedersen, 1989).
Given the pragmatic attitude of the Nordic public sector management,
and its ability to pick up and implement managerial practices from private
industry, it has been argued that Nordic public sector infrastructure firms
are capable of maintaining a high level of productive and organizational
efficiency. From a stakeholder perspective, it is even arguable that the prag-
matic politicisation through the public ownership facilitates harmonious
adaptation of the industry to its environment, which again supports a non-
conflictual operation.
Nevertheless, the model raises two major concerns: first, when the focus
is shifted from static efficiency to dynamic, transformational and configu-
rational efficiency one may question the competitive capability and the
ability to stage efficient business strategies even from pragmatically ori-
ented public infrastructure companies. Secondly, when the sector is opened
up to international competition one may question the sustainability of the
public sector model as a basis for business configuration under participa-
...