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The case for international coordination of electricity regulation : evidence from the measurement of efficiency in South America

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  • Estache, Antonio
  • Rossi, Martin A.
  • Ruzzier, Christian A.

Abstract

A decade long experience shows that monitoring the performance of public and private monopolies in South America is proving to be the hard part of the reform process. The operators who control most of the information needed for regulatory purposes have little interest in volunteering their dissemination unless they have an incentive to do so. The authors argue that, in spite of, and maybe because of, a much weaker information base and governance structure, South America's electricity sector could pursue an approach that relies on performance rankings based on comparative efficiency measures. The authors show that with the rather modest data currently available publicly, such an approach could yield useful results. They provide estimates of efficiency levels in South America's main distribution companies between 1994 and 2000. Moreover, the authors show how relatively simple tests can be used by regulators to check the robustness of their results and strengthen their position at regulatory hearings.

Suggested Citation

  • Estache, Antonio & Rossi, Martin A. & Ruzzier, Christian A., 2002. "The case for international coordination of electricity regulation : evidence from the measurement of efficiency in South America," Policy Research Working Paper Series 2907, The World Bank.
  • Handle: RePEc:wbk:wbrwps:2907
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    References listed on IDEAS

    as
    1. Tim Coelli & Antonio Estache & Sergio Perelman & Lourdes Trujillo, 2003. "A Primer on Efficiency Measurement for Utilities and Transport Regulators," World Bank Publications, The World Bank, number 15149.
    2. Bauer, Paul W. & Berger, Allen N. & Ferrier, Gary D. & Humphrey, David B., 1998. "Consistency Conditions for Regulatory Analysis of Financial Institutions: A Comparison of Frontier Efficiency Methods," Journal of Economics and Business, Elsevier, vol. 50(2), pages 85-114, March.
    3. Bagdadioglu, Necmiddin & Waddams Price, Catherine M. & Weyman-Jones, Thomas G., 1996. "Efficiency and ownership in electricity distribution: A non-parametric model of the Turkish experience," Energy Economics, Elsevier, vol. 18(1-2), pages 1-23, April.
    4. Tim Coelli & Sergio Perelman & Elliot Romano, 1999. "Accounting for Environmental Influences in Stochastic Frontier Models: With Application to International Airlines," Journal of Productivity Analysis, Springer, vol. 11(3), pages 251-273, June.
    5. Peter Bogetoft, 1997. "DEA-based yardstick competition: The optimality of best practice regulation," Annals of Operations Research, Springer, vol. 73(0), pages 277-298, October.
    6. Battese, George E. & Corra, Greg S., 1977. "Estimation Of A Production Frontier Model: With Application To The Pastoral Zone Of Eastern Australia," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 21(3), pages 1-11, December.
    7. Burns, Philip & Weyman-Jones, Thomas G, 1996. "Cost Functions and Cost Efficiency in Electricity Distribution: A Stochastic Frontier Approach," Bulletin of Economic Research, Wiley Blackwell, vol. 48(1), pages 41-64, January.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Economic Theory&Research; Environmental Economics&Policies; Enterprise Development&Reform; Labor Policies; Health Monitoring&Evaluation; Environmental Economics&Policies; Economic Theory&Research; Geographical Information Systems; Health Monitoring&Evaluation; Educational Technology and Distance Education;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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