What 'Regulatory State'? Explaining the Stability of Public Spending and Redistribution Functions after Regulatory Reforms of Electricity and Rail Services in the United Kingdom and Germany

In Europe, the rise of the regulatory state was accompanied by a broad diffusion of research on the processes of privatisation, liberalisation, and reregulation of utilities, previously managed directly by the state. This article offers an empirical and theoretical discussion of the paradigm of the regulatory state. It proposes to evaluate the transformation of the actual functions of the welfare state in a context of reforms of network industries over the last twenty years. Relying on cases from the electricity and railways sectors, it studies the changing balance between the traditional functions of the welfare state and the new regulatory functions introduced by the reforms. This article explains how, alongside the strengthening of regulatory functions, states maintained and developed powerful redistribution functions. The emerging regulatory state is not substituted for the positive/welfare state, but partly juxtaposed with it, making the structures for governing these sectors much less easy to read.