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Universal(ly bad) service - providing infrastructure services to rural and poor urban consumers

Author

Listed:
  • Clarke, George R.G.
  • Wallsten, Scott J.

Abstract

Until recently, utility services (telecommunications, power, water, and gas) throughout the world were provided by large, usually state-owned, monopolies. However, encouraged by technological change, regulatory innovation, and pressure from international organizations, many developing countries are privatizing state-owned companies and introducing competition. Some observers worry that even if reforms improve efficiency, they might compromise an important public policy goal-ensuring"universal access"for low-income and rural households. The authors review the motivation for universal service, methods used to try to achieve it under monopoly service provision, how reforms might affect these approaches, and the theoretical and empirical evidence of the impact of reform on these consumers. Next, using household data from around the world, they investigate empirically the historical performance of public monopolies in meeting universal service obligations and the impact of reform. The results show the massive failure of state monopolies to provide service to poor and rural households everywhere except Eastern Europe. Moreover, while the data are limited, the evidence suggests that reforms have not harmed poor and rural consumers, and in many cases have improved their access to utility services. Nevertheless, because competition undermines traditional methods of funding universal service objectives (cross-subsidies), the authors also review mechanisms that could finance these objectives without compromising the benefits of reforms.

Suggested Citation

  • Clarke, George R.G. & Wallsten, Scott J., 2002. "Universal(ly bad) service - providing infrastructure services to rural and poor urban consumers," Policy Research Working Paper Series 2868, The World Bank.
  • Handle: RePEc:wbk:wbrwps:2868
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    References listed on IDEAS

    as
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    7. Rosston, Gregory L. & Wimmer, Bradley S., 2000. "The 'state' of universal service," Information Economics and Policy, Elsevier, vol. 12(3), pages 261-283, September.
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    Cited by:

    1. repec:eee:rensus:v:79:y:2017:i:c:p:1380-1391 is not listed on IDEAS
    2. Kirkpatrick, Colin & Parker, David & Zhang, Yin-Fang, 2004. "State versus Private Sector Provision of Water Services in Africa: A Statistical, DEA and Stochastic Cost Frontier Analysis," Centre on Regulation and Competition (CRC) Working papers 30604, University of Manchester, Institute for Development Policy and Management (IDPM).
    3. Michael Webber, 2012. "Making Capitalism in Rural China," Books, Edward Elgar Publishing, number 14446.
    4. repec:eee:rensus:v:81:y:2018:i:p1:p:669-681 is not listed on IDEAS
    5. Estache, Antonio & Laffont, Jean-Jacques & Zhang, Xinzhu, 2006. "Universal service obligations in LDCs: The effect of uniform pricing on infrastructure access," Journal of Public Economics, Elsevier, vol. 90(6-7), pages 1155-1179, August.
    6. Biancini, Sara, 2011. "Behind the scenes of the telecommunications miracle: An empirical analysis of the Indian market," Telecommunications Policy, Elsevier, vol. 35(3), pages 238-249, April.
    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. Kirkpatrick, Colin & Parker, David & Zhang, Yin-Fang, 2004. "Foreign Direct Investment in Infrastructure in Developing Countries: Does Regulation Make a Difference?," Centre on Regulation and Competition (CRC) Working papers 30703, University of Manchester, Institute for Development Policy and Management (IDPM).
    9. Matthias Finger & Rolf W. Künneke (ed.), 2011. "International Handbook of Network Industries," Books, Edward Elgar Publishing, number 12961.
    10. Catarina Figueira & David Parker, 2011. "Infrastructure Liberalization: Challenges to the New Economic Paradigm in the Context of Developing Countries," Chapters,in: International Handbook of Network Industries, chapter 27 Edward Elgar Publishing.
    11. Garbacz, Christopher & Thompson, Herbert Jr., 2005. "Universal telecommunication service: A world perspective," Information Economics and Policy, Elsevier, vol. 17(4), pages 495-512, October.
    12. Devkar, Ganesh A. & Mahalingam, Ashwin & Deep, Akash & Thillairajan, A., 2013. "Impact of Private Sector Participation on access and quality in provision of electricity, telecom and water services in developing countries: A systematic review," Utilities Policy, Elsevier, vol. 27(C), pages 65-81.
    13. Marco Schouten & Klaas Schwartz, 2006. "Water as a political good: implications for investments," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 6(4), pages 407-421, December.
    14. repec:idb:idbbks:358 is not listed on IDEAS
    15. Philippe Marin, 2009. "Public-Private Partnerships for Urban Water Utilities : A Review of Experiences in Developing Countries," World Bank Publications, The World Bank, number 2703, June.
    16. Chisari, Omar O. & Ferro, Gustavo, 2005. "Macroeconomic shocks and regulatory dilemmas: The affordability and sustainability constraints and the Argentine default experience," The Quarterly Review of Economics and Finance, Elsevier, vol. 45(2-3), pages 403-420, May.
    17. Lai, Lawrence W.C. & Chau, K.W. & Lorne, Frank T., 2016. "The rise and fall of the sand monopoly in colonial Hong Kong," Ecological Economics, Elsevier, vol. 128(C), pages 106-116.
    18. Clive Harris, 2003. "Private Participation in Infrastructure in Developing Countries : Trends, Impacts, and Policy Lessons," World Bank Publications, The World Bank, number 15124, June.
    19. repec:gam:jsusta:v:10:y:2018:i:5:p:1599-:d:146710 is not listed on IDEAS
    20. Kirkpatrick, Colin & Parker, David, 2004. "Regulation and the Privatisation of Water Services in Developing Countries: Assessing the Impact of the General Agreement on Trade in Services (GATS)," Centre on Regulation and Competition (CRC) Working papers 30600, University of Manchester, Institute for Development Policy and Management (IDPM).
    21. Vivien Foster & José Luis Guasch & Luis Andrés & Thomas Haven, 2008. "The Impact of Private Sector Participation in Infrastructure: Lights, Shadows, and the Road Ahead," IDB Publications (Books), Inter-American Development Bank, number 59818, February.
    22. Luis A. Andrés & J. Luis Guasch & Thomas Haven & Vivien Foster, 2008. "The Impact of Private Sector Participation in Infrastructure : Lights, Shadows, and the Road Ahead," World Bank Publications, The World Bank, number 6545, June.

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