Embedded regulation: the knowledge networks that enable electricity decarbonization
2025-05-12
Since the 1980s, the idea that designed markets function best as self-sufficient systems detached from government and society has been a cornerstone of the electricity sector’s liberalization programs. However, technological advancements and political mandates for decarbonization bring new opportunities to challenge this thesis. This article clarifies why the arrangements of knowledge exchange networks are relevant to understand the governance of designed markets. The arrangement of regulator’s social embeddedness matters, independently of market structure. This research leverages the comparison of three countries with markedly different models of electricity governance—Chile, China, and Mexico—to explore how governments manufacture the conditions for robust action in industrial governance. The analysis reveals three distinct forms of reconfiguration of knowledge networks, forming new expert organizations, appropriating expert organizations owned by the industry, and diversifying the nature of knowledge exchange relations. The institutional approach to solve governing challenges by further embedding regulators, rather than liberalizing markets.