AN EMPIRICAL EXAMINATION OF THE CASE FOR POST OFFICE DIVESTITURE IN THE UK
| Author | Edward L. Lynk,Lester C. Hunt |
| Published date | 01 May 1991 |
| Date | 01 May 1991 |
| DOI | http://doi.org/10.1111/j.1467-9485.1991.tb00309.x |
Sroltish
Journul
of
Po/ilicu/
Economy,
VoI.
38,
No.
2.
May
1991
0
1991
Scottish
Economic Society
AN EMPIRICAL EXAMINATION OF THE CASE
FOR POST OFFICE DIVESTITURE IN THE
UK
LESTER C. HUNT
Department
of
Economics, University
of
Surrey
AND
EDWARD
L.
LYNK
Department
of
Economics, University College
of
Swansea
I
INTRODUCTION
The question of the appropriate structure of the
UK
postal industry has occu-
pied the minds of economists and policy makers for over a century.
Throughout this period the possibility of removing the Post Office
(PO)
mon-
opoly of mail services and the injection of competition has been raised several
times (see, for example, Coase,
1961).
This was, and has been, given fresh
impetus by the poor performance of the PO in the
1970s,
the advent
of
the
postal strike in
1971
and the predilection of the present Government for the
private provision of goods and services. In particular the postal strike induced
the
PO
for the first time to use its powers to grant licences to private postal
operators enabling them to carry letters for the duration of the strike (see
Senior,
1989,
p. 103
for
further details). This was extended further when the
Telecommunications Act
of
1981
in addition to separating posts from telecom-
munications also transferred the power
to
remove monopoly status from the
PO
itself and to the Minister of Trade and Industry.
Following widespread dissatisfaction with the performance
of
the national-
ised industries and public corporations recent years have seen a series of
activities, traditionally provided by the State and regarded as natural mono-
polies, returned
or
transferred to private ownership through privatisation. It
appears that several
PO
services are presently being prepared
for
privatisation,
starting with Girobank and
to
be fcllowed by parcels and counter services. The
purpose of this paper
is
to
examine the issues involved in such
a
policy and to
Date
of
receipt
of
final manuscript:
26
April
1990.
177
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