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Toward a social policy for Argentina's infrastructure sectors - evaluating the past and exploring the future


  • Foster, Vivien


Argentina was a pioneer of infrastructure reform in the early 1990s. The social dimension of infrastructure services was typically overlooked in the reform process. However, social sensitivities often resurfaced in the years that followed, leading to a series of ad hoc social policy measures that cumulatively amount to US$200 million a year. Foster quantifies and prioritizes the social challenges faced by the Argentine infrastructure sectors, evaluates how well existing social policies are functioning, and provides illustrative simulations of how certain changes in the design of social policy could improve the performance of current social policies. The author's findings are that current social policies do not prove to be very effective in targeting resources to the poor. They have no real impact on the distribution ofincome across customers. An important reason for this targeting failure is the tendency to allocate resources to all households resident in a particular geographical area, irrespective of socioeconomic status. A series of simulations that limit subsidies to households reaching a minimum score on a multidimensional poverty index show that individual targeting of this kind potentially leads to a more progressive distribution of subsidies. However, the greatest improvements in targeting performance would be achieved if efforts switched from subsidizing the use of infrastructure services to subsidizing connections to those services.

Suggested Citation

  • Foster, Vivien, 2004. "Toward a social policy for Argentina's infrastructure sectors - evaluating the past and exploring the future," Policy Research Working Paper Series 3422, The World Bank.
  • Handle: RePEc:wbk:wbrwps:3422

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    References listed on IDEAS

    1. Gasmi, F. & Laffont, J. J. & Sharkey, W. W., 2000. "Competition, universal service and telecommunications policy in developing countries," Information Economics and Policy, Elsevier, vol. 12(3), pages 221-248, September.
    2. H. Cremer & F. Gasmi & A. Grimaud & J. J. Laffont, 2001. "Universal Service: An economic perspective," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 72(1), pages 5-43, March.
    3. Eric Maskin, 1999. "Nash Equilibrium and Welfare Optimality," Review of Economic Studies, Oxford University Press, vol. 66(1), pages 23-38.
    4. Jean Tirole, 1985. "Hierarchies and Bureaucracies," Working papers 363, Massachusetts Institute of Technology (MIT), Department of Economics.
    5. Guesnerie, Roger & Laffont, Jean-Jacques, 1984. "A complete solution to a class of principal-agent problems with an application to the control of a self-managed firm," Journal of Public Economics, Elsevier, vol. 25(3), pages 329-369, December.
    6. Omar Chisari & Antonio Estache & Catherine Waddams Price, 2003. "Access by the poor in Latin America's utility reform: subsidies and service obligations," Chapters,in: Utility Privatization and Regulation, chapter 2 Edward Elgar Publishing.
    7. Laffont, Jean-Jacques & N'Gbo, Ake, 2000. "Cross-subsidies and network expansion in developing countries," European Economic Review, Elsevier, vol. 44(4-6), pages 797-805, May.
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    Cited by:

    1. Post, Alison E. & Murillo, María Victoria, 2016. "How Investor Portfolios Shape Regulatory Outcomes: Privatized Infrastructure After Crises," World Development, Elsevier, vol. 77(C), pages 328-345.
    2. Whittington, Dale & Nauges, Céline & Fuente, David & Wu, Xun, 2015. "A diagnostic tool for estimating the incidence of subsidies delivered by water utilities in low- and medium-income countries, with illustrative simulations," Utilities Policy, Elsevier, vol. 34(C), pages 70-81.


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