Political institutions of electricity regulation: The case of Turkey

Turkey has been going through a liberalization process in its electricity market over the last decade. So far, the regulatory content of the market reforms has been in the center of attention in the literature, to the negligence of regulatory governance. However, recent studies, which applied the theoretical insights of new institutional economics to utilities regulation, have demonstrated that political endowments of the country draw the boundaries to which extent such regulatory content can be effectively implemented. In line with these studies, this paper adopts an institutional approach and attempts to identify the political endowments of Turkey in order to further analyze whether the market reforms succeeded in bringing about sufficient checks to cure the institutional problems. In other words, the paper takes a picture of the overall regulatory arena. The results show that the current regulatory structure, especially government-regulator relations, yet fails to meet good regulatory governance criteria. The paper also provides some policy suggestions. - Highlights: → Regulatory governance matters as much as regulatory content. → Political institutions draw boundaries to the implementation of regulatory content. → Market reforms have been insufficient to bring about a true institutional change. → Institutional checks must be devised to limit government interference to the market.