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Utility privatization and the needs of the poor in Latin America - Have we learned enough to get it right?

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Author Info

  • Estache, Antonio
  • Gomez-Lobo, Andres
  • Leipziger, Danny

Abstract

Efforts to reform utilities can affect poor households in varied, often complex, ways, but it is by no means certain that such reform will hurt vulnerable households. Many myths have been perpetuated in discussions of utility reform - and in many cases poor households have benefited from reform. What is amazing is the extent to which governments, and their advisors - sometimes including multilateral organizations - fail to measure, anticipate, and monitor how the privatization of utilities actually affects the poor. Many questions must still be answered before good general guidelines can be drawn, but the authors offer many suggestions about how social, regulatory, and privatization policy, can increase the benefits of utility reform for poor households. The good news is that many measures can be taken to improve the chances that poor households will benefit from reform. Chief among these is promoting competition, where possible. Essentially what is needed is political commitment to doing the right thing. If policy is weak before privatization, it is going to be weak after privatization as well. Privatization is no substitute for responsible policy on redistribution.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2407.

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Date of creation: 31 Aug 2000
Date of revision:
Handle: RePEc:wbk:wbrwps:2407

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Related research

Keywords: Environmental Economics&Policies; Trade Finance and Investment; Municipal Financial Management; Decentralization; Banks&Banking Reform; Environmental Economics&Policies; Banks&Banking Reform; Public Sector Economics&Finance; Town Water Supply and Sanitation; Municipal Financial Management;

References

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  1. Pablo Serra, 2000. "Subsidies in Chilean Public Utilities," Documentos de Trabajo 70, Centro de Economía Aplicada, Universidad de Chile.
  2. Komives, Kristin & Whittington, Dale & Wu, Xun, 2001. "Infrastructure coverage and the poor : the global perspective," Policy Research Working Paper Series 2551, The World Bank.
  3. Vickers, John, 1997. "Regulation, Competition, and the Structure of Prices," Oxford Review of Economic Policy, Oxford University Press, vol. 13(1), pages 15-26, Spring.
  4. Ahmad,Etisham & Stern,Nicholas, 1991. "The Theory and Practice of Tax Reform in Developing Countries," Cambridge Books, Cambridge University Press, number 9780521397421, Fall.
  5. S. Baranzoni & P. Bianchi & L. Lambertini, 2000. "Market Structure," Working Papers 368, Dipartimento Scienze Economiche, Universita' di Bologna.
  6. Dollar, David & Kraay, Aart, 2001. "Growth is good for the poor," Policy Research Working Paper Series 2587, The World Bank.
  7. Sandmo, Agnar, 1998. "Redistribution and the marginal cost of public funds," Journal of Public Economics, Elsevier, vol. 70(3), pages 365-382, December.
  8. 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.
  9. Chisari, Omar & Estache, Antonio & Romero, Carlos, 1999. "Winners and Losers from the Privatization and Regulation of Utilities: Lessons from a General Equilibrium Model of Argentina," World Bank Economic Review, World Bank Group, vol. 13(2), pages 357-78, May.
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Citations

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Cited by:
  1. Gabriele, Alberto, 2004. "Policy alternatives in reforming energy utilities in developing countries," Energy Policy, Elsevier, vol. 32(11), pages 1319-1337, July.
  2. Barja, Gover & Urquiola, Miguel, 2001. "Capitalization, regulation and the poor: access to basic services in Bolivia," MPRA Paper 23920, University Library of Munich, Germany, revised Jul 2001.
  3. Nepal, R. & Jamasb, T., 2011. "Reforming Small Power Systems under Political Volatility: The Case of Nepal," Cambridge Working Papers in Economics 1133, Faculty of Economics, University of Cambridge.
  4. Parker, David & Kirkpatrick, Colin, 2003. "Privatisation in Developing Countries: A Review of the Evidence and the Policy Lessons," Centre on Regulation and Competition (CRC) Working papers 30623, University of Manchester, Institute for Development Policy and Management (IDPM).
  5. Kayaga, Sam & Franceys, Richard, 2007. "Costs of urban utility water connections: Excessive burden to the poor," Utilities Policy, Elsevier, vol. 15(4), pages 270-277, December.
  6. Calderon, Cesar & Serven, Luis, 2004. "The effects of infrastructure development on growth and income distribution," Policy Research Working Paper Series 3400, The World Bank.
  7. Parker, David & Kirkpatrick, Colin & Figueira-Theodorakopoulou, Catarina, 2008. "Infrastructure regulation and poverty reduction in developing countries: A review of the evidence and a research agenda," The Quarterly Review of Economics and Finance, Elsevier, vol. 48(2), pages 177-188, May.
  8. Kikeri, Sunita & Nellis, John, 2002. "Privatization in competitive sectors : the record to date," Policy Research Working Paper Series 2860, The World Bank.
  9. World Bank, 2002. "India : Power Sector Reform and the Poor," World Bank Other Operational Studies 15286, The World Bank.
  10. Colin Kirkpatrick & David Parker, 2005. "Domestic Regulation and the WTO: The Case of Water Services in Developing Countries," The World Economy, Wiley Blackwell, vol. 28(10), pages 1491-1508, October.
  11. Parker, David & Kirkpatrick, Colin, 2002. "Researching Economic Regulation in Developing Countries: Developing a Methodology for Critical Analysis," Centre on Regulation and Competition (CRC) Working papers 30665, University of Manchester, Institute for Development Policy and Management (IDPM).
  12. Calderon, Cesar & Serven, Luis, 2008. "Infrastructure and economic development in Sub-Saharan Africa," Policy Research Working Paper Series 4712, The World Bank.
  13. Clive Harris, 2003. "Private Participation in Infrastructure in Developing Countries : Trends, Impacts, and Policy Lessons," World Bank Publications, The World Bank, number 15124, October.
  14. Barja, Gover & Urquiola, Miguel, 2003. "Capitalization and Privatization in Bolivia: An Aproximation to an Evaluation," MPRA Paper 23049, University Library of Munich, Germany.
  15. Daniele CHECCHI & Massimo FLORIO & Jorge CARRERA, 2004. "Privatization discontent and its determinants: evidence from Latin America," Departmental Working Papers 2004-23, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
  16. Wamukonya, Njeri, 2003. "Power sector reform in developing countries: mismatched agendas," Energy Policy, Elsevier, vol. 31(12), pages 1273-1289, September.
  17. Barja, Gover & McKenzie, David & Urquiola, Miguel, 2004. "Bolivian capitalization and privatization: Approximation to an evaluation," MPRA Paper 23878, University Library of Munich, Germany, revised Oct 2005.

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