Privatization and Regulation of Public Utilities in Latvia

The interaction between: (i) political constraints, in part based on notions of “nation building,” and independence; (ii) the development of a suitable legal and regulatory environment; and (iii) economic constraints such as a growing state budget deficit and a recent banking crisis, are the subject of this paper. The paper will review and discuss the main political economy and competition issues associated with the regulation and privatization of public energy and telecommunications utilities in Latvia during transition, with particular reference to case studies of Latvenergo and Lattelekom.