this post was submitted on 25 Mar 2021
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This is a good example for a natural monopoly, but that does not mean that there can't be regional suppliers that cooperate with each other in a decentralized way or covering different market segments.
Could, but should? Depends on the goal we're trying to achieve. Efficiency of delivery I'd say monopoly in this context. Regional specialization maybe decentralized, but what benefits in postal services would it bring?
What benefit would centralization bring over a regional monopoly service? Postal services have regional distribution centers anyways, so you just agree on a inter-operation standard and then these can be independent entities. I see absolutely no increased efficiency or other advantage of some kind of centralization in such a context once every entity agrees on such a standard.
Edit: It would simply work via the typical concession model. Every 5 years of so the government or who ever decides the interoperation standard makes a open tender for a certain regional service or a specialization topic. Companies or cooperatives can submit their offers and proposed cost recovery models and the best offer gets a natural monopoly for 5 years (or 10 years what ever). Such a model is commonly used and works quite well if it doesn't involve big investments in long lived infrastructure.
Maybe we have a different understanding of centralization? For me centralization means a centrally controlled and monopolized service. Just having a natural monopoly in certain areas or topics doesn't make a service centralized, it also needs to have a single entity controlling everything.
Isn't the US postal system a single entity controlling everything? Yes they have regional distribution centres but it's still a single entity. I guess it depends on your definition of everything. I don't mean a single distribution centre of course.
Agree that we're using different definitions of decentralization. My interpretation of decentralization is where transfer of authority or management of a service or function moves from a centralized national or digital single-entity/corporation to a geographically regional or digitally autonomous (multiple) entity(ies).
IMO natural monopolies are good examples where decentralization of processes should not occur. However, that's not to comment on whether those centralized monopolies will be more resilient to political opportunism or other potential negative impacts of centralization. This is a layered concept for sure, easy to get into debates about.