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The limits to competition in urban bus services in developing countries

  • Antonio Estache
  • Andrés Gómez-Lobo

This paper makes the case for the return of regulation in the organization of urban bus services in developing countries. During the past three decades urban public transport policy has transversed several phases. From public ownership and monopoly provision, the eighties and nineties was characterized by liberalization of the sector. The experience of several countries, in particular Chile, indicates that liberalizing the sector may not be the welfare maximizing option. This paper discusses the market failures that justify this claim and presents the regulatory options available in this emerging new role of government. Throughout the paper we illustrate ideas with examples from Chile, Colombia and a few other countries.

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File URL: http://www.econ.uchile.cl/uploads/publicacion/4123be85-5e73-437f-a0c4-fdffe6b50cd8.pdf
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Paper provided by University of Chile, Department of Economics in its series Working Papers with number wp205.

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Date of creation: Dec 2003
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Handle: RePEc:udc:wpaper:wp205
Contact details of provider: Web page: http://www.econ.uchile.cl/

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  1. Gagnepain, Philippe & Ivaldi, Marc, 1999. "Incentive Regulatory Policies: The Case of Public Transit Systems in France," IDEI Working Papers 84, Institut d'Économie Industrielle (IDEI), Toulouse.
  2. Jean-Jaques Laffont & Jean Tirole, 1985. "Auctioning Incentive Contracts," Working papers 403, Massachusetts Institute of Technology (MIT), Department of Economics.
  3. Mohring, Herbert, 1972. "Optimization and Scale Economies in Urban Bus Transportation," American Economic Review, American Economic Association, vol. 62(4), pages 591-604, September.
  4. Jean-Jacques Laffont & Jean Tirole, 1993. "A Theory of Incentives in Procurement and Regulation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121743, June.
  5. Andrei Shleifer, 1985. "A Theory of Yardstick Competition," RAND Journal of Economics, The RAND Corporation, vol. 16(3), pages 319-327, Autumn.
  6. Richard Schmalensee, 1978. "Entry Deterrence in the Ready-to-Eat Breakfast Cereal Industry," Bell Journal of Economics, The RAND Corporation, vol. 9(2), pages 305-327, Autumn.
  7. Steven C. Salop, 1979. "Monopolistic Competition with Outside Goods," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 141-156, Spring.
  8. Philippe Gagnepain & Marc Ivaldi, 2002. "Incentive Regulatory policies: The Case of Public Transit Systems in France," Post-Print hal-00622846, HAL.
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