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Universal service obligations in developing countries

Author

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  • Estache, Antonio
  • Laffont, Jean-Jacques
  • Xinzhu Zhang

Abstract

This paper develops a model to analyze the impacts of asymmetric information on optimal universal, service policy in the public utilities of developing countries. Optimal universal service policy is implemented using two regulatory instruments: pricing and network investment. Under discriminatory pricing asymmetric information leads to a higher price, and smaller network in the rural area, than under full information. Under uniform pricing, the price is also lower but the network is even smaller. In addition, under both pricing regimes, not only the firm, but also taxpayers have incentives to collude with the regulator.

Suggested Citation

  • Estache, Antonio & Laffont, Jean-Jacques & Xinzhu Zhang, 2004. "Universal service obligations in developing countries," Policy Research Working Paper Series 3421, The World Bank.
    • Handle: RePEc:wbk:wbrwps:3421
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    References listed on IDEAS

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    Cited by:

    1. Gerlach, Esther & Franceys, Richard, 2010. "Regulating Water Services for All in Developing Economies," World Development, Elsevier, vol. 38(9), pages 1229-1240, September.
    2. Luo, Guo-liang & Guo, Yi-wei, 2013. "Rural electrification in China: A policy and institutional analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 23(C), pages 320-329.
    3. Gasmi, Farid & Recuero Virto, Laura, 2005. "Telecommunications Technologies: Deployment in Developing Countries," MPRA Paper 2443, University Library of Munich, Germany.
    4. Luisa Sciandra, 2005. "Une évaluation des effets de la privatisation sur l’accès aux ressources en eau dans les pays en développement," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 76(2), pages 233-255, June.
    5. Esther Gerlach & Richard Franceys, 2010. "'Standpipes and beyond'-a universal water service dynamic," Journal of International Development, John Wiley & Sons, Ltd., vol. 22(4), pages 455-469.

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