GOVERNMENTS AND INFRASTRUCTURE INDUSTRIES :INTERNATIONAL DIFFERENCES c : IDEOLOGY OR GEO- POLITICS? Bob Millward University of Manchester

1) Introduction Covers energy, telecoms, transport for Western Europe with some references to Japan/USA. The main thrust is to explore how far strategic factors are more important than ideologies about capitalism and socialism in explaining economic organisation. The historiography on this is fairly limited: individual countries (Austria-Hungary etc); Bogart, Wallsten, Baily studies, economic nationalism; Gazprom.

2) Framework of Analysis i) Ideological differences ii) Geo-politics iii) Political structure iv) Perceptions of national identity. Change: Important to recognise that form and relevance of the above factors will change over time, in particular as a result of changes in technology (new forms of transport, IT in telecoms industry etc.) and economic forces (rise in size of public sector )

3) The 19th Century a) New nation states increase strategic role of infrastructure industries, especially transport and telecom. b) Electric telegraph seen as insecure; all in state departments c) Strong initial state activity in rail development in Belgium, Italy, Prussia, Belgium, Sweden, Norway, Prussia d) Japan’s strategic needs lead to heavy support for shipping and firm control over railways e) US no hostile neighbours and regulation focuses on inter- state trade e) In sum state operates, rather than subsidises, for speed in construction, unprofitable lines, direct control.

4) Early 20th Century a) Britain & Ireland strategic decisions b) Airlines emerge as national flag carriers c) Common structural and universal service problems in infrastructure but arm’s length regulation not a favoured policy after depression years d) Influence of ideology seems important (especially in coal) in Britain and France in 1940s but even here both concentrate on ‘basic industries’ not ‘means of production’. Net result is by 1950, railways, electricity, coal, gas, airlines and telecommunications were fully or partly government owned everywhere in Western Europe.

5) Privatisation a) Strategic issues were important for airlines and telecoms in the mid 20th century but technological and political changes undermine monopoly structure and strategic role. b) State enterprise financial losses an important element in privatisation as also disappearance of worries about arms’length regulation but common to all. c) Questions about security and about social and political unification still important but a wider range of instruments available d) Privatisation more partial and less extensive in natural monopoly sectors where strategic concerns remain. e) Cont. European governments still linked more closely (than SA and UK) to infrastructure industries, mainly via shares, including golden ones.

6) Conclusions a) Strategic issues seem to account for much of the differences in the business/state interface in the 19th century b) Similar issues for airlines and telecoms in mid 20th c) Performance studies need to focus on government objectives d) Focus for strategic issues by late 20th moved away from traditional instruments and regulatory problems of the sectors more dominant e) Cont. gov.s still differ from UK/US in strategic shareholding.