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Electricity Reform in Chile Lessons for Developing Countries

  • Michael Pollitt

Chile was the first country in the world to implement a comprehensive reform of its electricity sector in the recent period. Among developing countries only Argentina has had a comparably comprehensive and successful reform. This paper traces the history of the Chilean reform, which began in 1982, and assesses its progress and its lessons. We conclude that the reform has been very successful. We suggest lessons for the generation, transmission and distribution sectors, as well as the economic regulation of electricity and the general institutional environment favourable to reform. We note that while the initial market structure and regulatory arrangements did give rise to certain problems, the overall experience argues strongly for the private ownership and operation of the electricity industry.

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Paper provided by Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research in its series Working Papers with number 0416.

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Date of creation: Sep 2004
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Handle: RePEc:mee:wpaper:0416
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  1. Antonio Estache & Martin Rossi & Christian Ruzzier, 2004. "The Case for International Coordination of Electricity Regulation: Evidence from the Measurement of Efficiency in South America," ULB Institutional Repository 2013/43975, ULB -- Universite Libre de Bruxelles.
  2. Eduardo Bitrán & Pablo Serra, 1998. "Regulation of Privatized Utilities: The Chilean Experience," Documentos de Trabajo 32, Centro de Economía Aplicada, Universidad de Chile.
  3. Federico Basañes & Eduardo Saavedra & Raimundo Soto, . "Post-Privatization Renegotiations and Disputes in Chile," ILADES-Georgetown University Working Papers inv117, Ilades-Georgetown University, Universidad Alberto Hurtado/School of Economics and Bussines.
  4. William B. Heller & Mathew D. McCubbins, 1996. "Politics, institutions, and outcomes: Electricity regulation in Argentina and Chile," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 1(4), pages 357-387.
  5. Rodrigo Gutierrez & Pablo Serra & Ronald Fischer, 2003. "The Effects of Privatization on Firms and on Social Welfare: The Chilean Case," Research Department Publications 3150, Inter-American Development Bank, Research Department.
  6. Ronald Fischer & Rodrigo Gutiérrez & Pablo Serra, 2002. "The Effects of Privatization on Firms and on Social Welfare," Documentos de Trabajo 131, Centro de Economía Aplicada, Universidad de Chile.
  7. Ronald Fischer & Alexander Galetovic, 2003. "Regulatory governance and chile's 1998-1999 electricity shortage," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 6(2), pages 105-125.
  8. M.G. Pollitt, 2000. "The Declining Role of the State in Infrastructure Investments in the UK," Cambridge Working Papers in Economics 0001, Faculty of Economics, University of Cambridge.
  9. Green, Richard & Newbery, David M G, 1991. "Competition in the British Electricity Spot Market," CEPR Discussion Papers 557, C.E.P.R. Discussion Papers.
  10. Domah, P. & Pollitt, M.G., 2000. "The Restructuring and Privatisation of Electricity Distribution and Supply Businesses in England and Wales: A Social Cost Benefit Analysis," Cambridge Working Papers in Economics 0007, Faculty of Economics, University of Cambridge.
  11. Pollitt, M.G., 2004. "‘Electricity Reform in Argentina: Lessons for Developing Countries’," Cambridge Working Papers in Economics 0449, Faculty of Economics, University of Cambridge.
  12. Littlechild, S.C. & Skerk, C.J., 2004. "Regulation of transmission expansion in Argentina Part I: State ownership, reform and the Fourth Line," Cambridge Working Papers in Economics 0464, Faculty of Economics, University of Cambridge.
  13. Ronald Fischer & Pablo Serra, 2000. "Regulating the Electricaly Sector in Latin America," Documentos de Trabajo 86, Centro de Economía Aplicada, Universidad de Chile.
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