Abstract
The introduction of liberalisation and public management reforms have arguably led to a shift from ‘the entrepreneurial state’ towards ‘the regulatory state or to a transformation from a ‘Keynesian Welfare state’ to a more ‘Hayekian regulatory sate’. The purpose of this study is to explore the relationship between public management reform and privatisation and declares the reasons towards the regulatory state, especially re-regulation for privatisation in public utilities. It also clarifies a number of issues between regulatory governance and privatisation in a broader context. Based on the literature review, it is argued that regulatory governance is crucial to an understanding of the strengths and weaknesses of re-regulation for privatising public utilities to incorporate the missing public value into. In conclusion, this study employs institutional approach to research governance mechanisms for regulation and reveals the significance of regulatory capacity. Given the variety of statements in the field of public management, it is argued that governance mechanisms for regulation, especially regulatory capacity, provides a more effective response than narrow ‘traditional’ notion of new public management to ‘privatisation deficiencies’ of public utilities.