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Universal service obligations in developing countries

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Author Info
Estache, Antonio
Laffont, Jean-Jacques
Xinzhu Zhang

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Abstract

This paper develops a model to analyze the impacts of asymmetric information on optimal universal, service policy in the public utilities of developing countries. Optimal universal service policy is implemented using two regulatory instruments: pricing and network investment. Under discriminatory pricing asymmetric information leads to a higher price, and smaller network in the rural area, than under full information. Under uniform pricing, the price is also lower but the network is even smaller. In addition, under both pricing regimes, not only the firm, but also taxpayers have incentives to collude with the regulator.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3421.

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Date of creation: 01 Oct 2004
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Handle: RePEc:wbk:wbrwps:3421

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Related research
Keywords: Environmental Economics&Policies; Knowledge Economy; Insurance&Risk Mitigation; Economic Theory&Research; Insurance Law; Education for the Knowledge Economy; Knowledge Economy; Economic Theory&Research; Environmental Economics&Policies; Geographical Information Systems;

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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.:
  1. Jean Tirole, 1985. "Hierarchies and Bureaucracies," Working papers 363, Massachusetts Institute of Technology (MIT), Department of Economics.
  2. Guesnerie, Roger & Laffont, Jean-Jacques, 1984. "A complete solution to a class of principal-agent problems with an application to the control of a self-managed firm," Journal of Public Economics, Elsevier, vol. 25(3), pages 329-369, December. [Downloadable!] (restricted)
  3. Chisari, Omar O. & Estache, Antonio & Waddams Price, Catherine, 2001. "Access by the Poor in Latin America's Utility Reform Subsidies and Service Obligations," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  4. Maskin, Eric, 1999. "Nash Equilibrium and Welfare Optimality," Review of Economic Studies, Blackwell Publishing, vol. 66(1), pages 23-38, January. [Downloadable!] (restricted)
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  5. Laffont, Jean-Jacques & N'Gbo, Ake, 2000. "Cross-subsidies and network expansion in developing countries," European Economic Review, Elsevier, vol. 44(4-6), pages 797-805, May. [Downloadable!] (restricted)
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Cited by:
(explanations, 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.)

  1. Gasmi, Farid & Recuero Virto, Laura, 2005. "Telecommunications Technologies: Deployment in Developing Countries," MPRA Paper 2443, University Library of Munich, Germany. [Downloadable!]
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