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Subsidies in Chilean Public Utilities

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  • Pablo Serra

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Abstract

This paper makes an analysis of subsidies in Chile's public utilities. Rates rebalancing have practically eliminated cross subsidies, and current subsidy programs are funded from the national budget. Over the last decade in particular, significant efforts have been made to extend public services to rural populations, and a consumption subsidy for potable water currently benefits 17% of the population. The Chilean experience shows it is possible to design subsidies targeted to the poor that do not cause deadweight losses, and at relatively low cost to the State. The elimination of cross subsidies has facilitated competition in some public services. Moreover, putting rural infrastructure projects out to public tender, whenever possible, has made it possible to substantially reduce government expenditure.

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File URL: http://www.dii.uchile.cl/~cea/sitedev/cea/www/download.php?file=documentos_trabajo/ASOCFILE120030328151843.pdf
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Bibliographic Info

Paper provided by Centro de Economía Aplicada, Universidad de Chile in its series Documentos de Trabajo with number 70.

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Date of creation: 2000
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Handle: RePEc:edj:ceauch:70

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  1. Andres Gomez-Lobo, 1996. "The welfare consequences of tariff rebalancing in the domestic gas market," Fiscal Studies, Institute for Fiscal Studies, vol. 17(4), pages 49-65, November.
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Cited by:
  1. World Bank, 2004. "Chile - Rural Infrastructure in Chile : Enhancing Efficiency and Sustainability," World Bank Other Operational Studies 14371, The World Bank.
  2. Michel Noel & W. Jan Brzeski, 2005. "Mobilizing Private Finance for Local Infrastructure in Europe and Central Asia : An Alternative Public Private Partnership Framework," World Bank Publications, The World Bank, number 7333, August.
  3. Estache, Antonio & Gomez-Lobo, Andres & Leipziger, Danny, 2000. "Utility privatization and the needs of the poor in Latin America - Have we learned enough to get it right?," Policy Research Working Paper Series 2407, The World Bank.

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