IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/3037.html
   My bibliography  Save this paper

Regulation and private sector investment in infrastructure - evidence from Latin America

Author

Listed:
  • Pargal, Sheoli

Abstract

The author assesses the importance of the regulatory framework as a determinant of private sector investment in infrastructure. She uses recently compiled data on private and public sector investment in the water, power, telecommunications, railroads, and roads sectors between 1980 and 1998 in nine countries in Latin America. The author finds that the most significant institutional determinant of private investment volumes is the passage of legislation liberalizing the investment regime. This is important because it indicates that the legal basis for reform is probably more critical in determining the quality of the investment climate than specific aspects of the institutional framework governing private sector participation. In accordance with intuition, the author's results indicate that government action to increase regulatory certainty and minimize the perceived risk of expropriation through the establishment of independent regulatory bodies is a critical determinant of the volume of private investment flows. She also finds that the general relationship of private to public investment is one of substitutability.

Suggested Citation

  • Pargal, Sheoli, 2003. "Regulation and private sector investment in infrastructure - evidence from Latin America," Policy Research Working Paper Series 3037, The World Bank.
  • Handle: RePEc:wbk:wbrwps:3037
    as

    Download full text from publisher

    File URL: http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2003/05/23/000094946_03051404103443/Rendered/PDF/multi0page.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Serven,Luis, 1996. "Does public capital crowd out private capital? : evidence from India," Policy Research Working Paper Series 1613, The World Bank.
    2. Warrick Smith, 1997. "Utility Regulators : Roles and Responsibilities," World Bank Other Operational Studies 11571, The World Bank.
    3. Ian Alexander & Timothy Irwin, 1997. "Price Caps, Rate-of-Return Regulation, and the Cost of Capital," World Bank Other Operational Studies 11575, The World Bank.
    4. Warrick Smith, 1997. "Utility Regulators : The Independence Debate," World Bank Other Operational Studies 11570, The World Bank.
    5. Aschauer, David Alan, 1989. "Does public capital crowd out private capital?," Journal of Monetary Economics, Elsevier, vol. 24(2), pages 171-188, September.
    6. Serven, Luis, 1997. "Irreversibility, Uncertainty and Private Investment: Analytical Issues and Some Lessons for Africa," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 6(3), pages 229-268, Supplemen.
    7. Pritchett, Lant, 2000. "The Tyranny of Concepts: CUDIE (Cumulated, Depreciated, Investment Effort) Is Not Capital," Journal of Economic Growth, Springer, vol. 5(4), pages 361-384, December.
    8. Wallsten, Scott, 2002. "Does sequencing matter? regulation and privatization in telecommunications reforms," Policy Research Working Paper Series 2817, The World Bank.
    9. Trujillo, Lourdes & Martin, Noelia & Estache, Antonio & Campos, Javier, 2002. "Macroeconomics effects of private sector participation in Latin America's infrastructure," Policy Research Working Paper Series 2906, The World Bank.
    10. Kerf, M. & Gray, R.D. & Irwin, T. & Levesque, C. & Taylor, R.R. & Klein, M., 1998. "Concessions for Infrastructure. A Guide to their Design and Award," Papers 399, World Bank - Technical Papers.
    11. Dailami, Mansoor & Leipziger, Danny, 1998. "Infrastructure Project Finance and Capital Flows: A New Perspective," World Development, Elsevier, vol. 26(7), pages 1283-1298, July.
    12. Reinikka, Ritva & Svensson, Jakob, 1999. "How inadequate provision of public infrastructure and services affects private investment," Policy Research Working Paper Series 2262, The World Bank.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ba, Lika & Gasmi, Farid & Noumba Um, Paul, 2010. "Is the level of financial sector development a key determinant of private investment in the power sector ?," Policy Research Working Paper Series 5373, The World Bank.
    2. Stern, Jon & Cubbin, John, 2005. "Regulatory effectiveness : the impact of regulation and regulatory governance arrangements on electricity industry outcomes," Policy Research Working Paper Series 3536, The World Bank.
    3. 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).
    4. Stern, J. & Cubbin, J., 2004. "Regulatory effectiveness: the impact of regulation and regulatory governance arrangements on electricity industry outcomes: a review paper," Working Papers 04/01, Department of Economics, City University London.
    5. Nagayama, Hiroaki, 2010. "Impacts on investments, and transmission/distribution loss through power sector reforms," Energy Policy, Elsevier, vol. 38(7), pages 3453-3467, July.
    6. Colin Kirkpatrick & David Parker & Yin-Fang Zhang, 2004. "Regulatory Impact Assessment in Developing and Transition Economies: A Survey of Current Practice," Public Money & Management, Chartered Institute of Public Finance and Accountancy, vol. 24(5), pages 291-296, October.
    7. Cubbin, J. & Stern, J., 2004. "Regulatory effectiveness: the impact of good regulatory governance on electricity industry capacity and efficiency in developing countries," Working Papers 04/04, Department of Economics, City University London.
    8. 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).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:3037. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi). General contact details of provider: http://edirc.repec.org/data/dvewbus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.