Institutional Arrangements for Cross-border Electricity Cooperation: Theoretical Deduction, International Experience and China's Choice
NIE Xinwei;SHI Dan;State Information Center;Institute of Industrial Economics, CASS;
After the proposition of the Belt and Road Initiative, cooperation between countries on infrastructure connectivity has developed rapidly. However, from the view of regional cooperation practice and theory research, as an important part of cooperation of the Belt and Road infrastructure connectivity, power connectivity is still facing two problems. First, as there exist prisoner's dilemma and opportunistic behavior, some agents may try to maximize their relative gain and abandon the cooperation surplus, resulting in the collective optimal unrealized. Second, institutional differences among countries and lack of unified institutional arrangement may cause the transaction cost to rise sharply, thus affect the optimal allocation of resources and overall welfare. Institution has a positive influence on agents and the game scene, so it's of great importance to rebuilt the institutional arrangement(variation of game rules) to promote power cooperation, improve resource allocation efficiency and realize the mutual interest. Based on these, this paper argues that institutional assimilation or the rebuilding of unified institution is a process that can eradicate the institutional differences which may hinder orderly competition, in-depth cooperation and free trade. As for different regimes, the aim of institution rebuilding is just to maintain a well state of competition and cooperation.