Regulatory Failure and Renewal develops a framework to understand the
choice of regulatory instrument used in Canada for natural monopolies
such as telephone companies, water utilities, streetcars,
hydroelectricity, and railways from the 1880s to the 1930s.Using the
transaction-cost literature pioneered by Oliver Williamson, John Baldwin
examines the nature of contractual failure in Canada in natural monopoly
cases, asking why initial forms of contracts between the state and
private enterprise failed and why this failure so often resulted in the
use of public enterprise. Baldwin outlines early attempts to deal with
natural monopolies - from the use of a franchise contract to regulatory
tribunals and finally to public enterprise - and compares Canadian
experiences to US approaches, which turned more frequently to regulatory
tribunals. This difference is due to Canada's more limited constraints
on the state's ability to exercise coercive power, which sometimes leads
to contractual failure that results in replacing franchise and
regulatory frameworks with public enterprise.Regulatory Failure and
Renewal demonstrates that public enterprise arose not so much as part of
a purposive choice but because of reoccurring failures in the
contractual process between the Canadian state and private enterprise.
