Transformations  in
Business & Economics

From a Monopoly towards an Imperfectly Competitive Electricity Market in Poland
Bozena Borkowska, Mikolaj Klimczak

ABSTRACT. Like other network industries (telecommunication, gas, rail) electricity is transformed from a monopoly to an imperfectly competitive market. This paper examines the electricity reform in Poland. We show that the reform fails in key aspects such as: industry restructuring, the creation of a transparent wholesale spot energy market and other institutions necessary to create clear rules in order to achieve reasonably competitive performance results. Among the many reasons for the lack of success, it seems that the predominance of state ownership in the electricity industry and strong politicization of the industry which made regulatory capture possible were essential. Asymmetric information and the lack of safeguards against opportunism allows companies to provide such data and expertise that affects the preferred solution for the industry in the way companies want it.

KEYWORDS: electricity market, regulation, privatization, opportunism, Poland.

JEL classification: D42, D43, K21, K22, L33, L43, L51, Q48, P2.