Tuesday, June 14, 2005

Debunking the liberalizers [pdf]

/ political / james randis /
The European comission's "Horizontal Evaluation Of The Performance Of Network Industries Providing Services Of General Economic Interest" (EC SEC(2004) 866) [pdf], is effectively revealed to be rather biased, in its market idolatry, so much that it ignores the evidence of its own research... This is a public service announcement brought to you via the (title-linked) report, commissioned by the European Federation of Public Service Unions (EPSU) and prepared by the PSIRU, Business School at the University of Greenwich.
A summarizing excerpt from the critical report:

"...The report starts with a statement of satisfaction: “the overall performance of services of general interest in the EU is good in terms of prices, employment, productivity, service quality, fulfilment of public service obligations and consumer satisfaction.” (Horizontal Evaluation Report p. 4) This statement is remarkable for a number of reasons, (including its mistake in referring to Services of General Interest rather than Services of General Economic Interest), because almost every item in it contradicts evidence in the report itself.

  • The claim about prices is at odds with the reports own acknowledgement later that all the liberalised industries, with the exception of air transport and telecoms, recorded price rises higher than general inflation in 2003;

  • the claim on employment is at odds with its own data that jobs in these sectors fell by 600,000 (7.5%) between 1991 and 2003;

  • the claim on productivity seems to flatly contradict its own observation that "no significant impact of reforms was identified on the growth of labour productivity" ;

  • the claim on service quality fits poorly with its own assessment, five pages later, which highlights the reliability of supply and environmentally-friendly production as the chosen quality indicators in electricity and declares that "For both, no significant improvements can be reported."

  • the assurance of consumer satisfaction sits uneasily with the results of the qualitative survey of consumer opinion, which shows widespread scepticism that consumers will benefit from liberalisation, and a dominant belief in the need for state responsibility in these sectors, including control of prices.

  • This encapsulates the general problems with the report. It identifies and presents much data of interest and relevance to an evaluation of Services of General Economic Interest, but fails to note some other data of importance and relevance, and often fails to draw reasonable conclusions from the data that it does. One reason for this is that the report is concerned above all to avoid any criticism of liberalisation. The net result is a statement of ideological complacency pasted over an incomplete review of evidence.

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