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Strengthening Regulation in Chile: The Case of Network Industries

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  • Alexander Galetovic
  • Luiz de Mello

Abstract

Chile’s regulatory framework is working reasonably well. The country’s structural reforms since the 1980s, with the privatisation of utilities and deregulation of product and labour markets, have improved resource allocation and increased the population’s access to basic services, while calling for a comprehensive upgrading of regulatory institutions. At the same time, public-private partnerships (PPPs) are contributing to closing Chile’s infrastructure deficit, particularly in transport. The recurrent cuts in shipments of natural gas from Argentina since 2004 have put additional strain on regulation in the electricity sector to encourage investment in generation and ensure the security of supply. This paper reviews regulatory reform in three network industries (electricity, gas and telecoms), where further liberalisation, particularly in electricity retailing, and improvements in the regulation of telecoms would do much to further improve the business climate. The governance of public-private partnerships can be improved by increasing transparency and accountability in the concession process. In doing so, the government’s exposure to contingent liabilities can be contained. This Working Paper relates to the 2005 OECD Economic Survey of Chile (www.oecd.org/eco/surveys/chile). Renforcer la réglementation au Chili : Le cas des industries de réseau Le cadre de la règlementation chilienne fonctionne assez bien. Les réformes structurelles depuis les années 80, avec la privatisation des services et la réglementation des marchés des produits et du travail, ont amélioré l'allocation des ressources et augmenté l'accès de la population aux services de base, en même temps que modernisé les institutions de réglementation. Parallèlement, les partenariats public-privé ont contribué à réduire le déficit d'infrastructure du Chili, particulièrement dans les transports. Les coupures récurrentes dans les exportations de gaz naturel de l'Argentine depuis 2004 ont ajouté une contrainte sur la réglementation du secteur d'électricité, qui a encouragé l'investissement dans la production et garanti la sécurité de l'offre. Ce document passe en revue les réformes de la réglementation dans trois industries de réseau (électricité, gaz et télécommunication), dans lesquelles plus de libéralisation, particulièrement concernant la vente de détail de l'électricité, et des progrès dans la réglementation des télécommunications, amélioreraient grandement le climat des affaires. La gouvernance des partenariats public-privé peut-être améliorée en augmentant la transparence et la responsabilité du processus de concession. En faisant ainsi le gouvernement évite de s'exposer à d'éventuels passifs. Ce Document de travail se rapporte à l'Étude économique de l'OCDE du Chili, 2005 (www.oecd.org/eco/etudes/chili).

Suggested Citation

  • Alexander Galetovic & Luiz de Mello, 2005. "Strengthening Regulation in Chile: The Case of Network Industries," OECD Economics Department Working Papers 455, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:455-en
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    File URL: http://dx.doi.org/10.1787/831502583012
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    Keywords

    Chile; Chili; electricity; gas; gaz; industrie de réseau; network industries; regulation; réglementation; telecommunications; télécommunications; électricité;

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • H4 - Public Economics - - Publicly Provided Goods
    • K2 - Law and Economics - - Regulation and Business Law

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