Review of Industrial Organization (2005) 26:169–193 © Springer 2005
Regulation and Deregulation after 25 Years:
Lessons Learned for Research in Industrial
PAUL L. JOSKOW
MIT, Department of Economics, E52-271d, 50 Memorial Drive, Cambridge, MA
Abstract. This paper is based on a keynote address given at the 2004 International Indus-
trial Organization Conference in Chicago, April 2004. I draw selectively on the literature
from the past 25 years on regulation/deregulation to provide important lessons about the
attributes of good research in empirical industrial organization.
Key words: deregulation, industrial organization, regulation
When I ﬁrst began doing research on issues related to government reg-
ulation of industry in the early 1970s, a signiﬁcant slice of the economy
was subject to some form of government price and/or entry regulation. The
affected industries included (a) airlines, (b) trucking, (c) railroads, (d) elec-
tric power, (e) natural gas production, (f) pipeline transportation and dis-
tribution of natural gas, (g) crude oil and reﬁned petroleum products, (h)
cable television, (i) automobile insurance, (j) hospital services, and others.
The share of these industries in GDP, while substantial, understates their
potential impact on overall economic performance of the economy since
they generally supplied important intermediate goods and services to down-
stream commercial and industrial users.
Beginning about 25 years ago legislative and regulatory actions began a
process of deregulation, vertical and horizontal industry restructuring and
regulatory reform that has now affected, to varying degrees, all of these
industries. Many of these industries have been completely transformed dur-
ing this period of time (e.g., airlines, trucking, and telecommunications).
Others are in the midst of more lengthy transitions that involve restruc-
turing and deregulation of major industry segments and the application of
new regulatory mechanisms to those segments that continue to be regulated