IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

The impact of privatization on the performance of the infrastructure sector : the case of electricity distribution in Latin American countries

Author Info

Listed author(s):
  • Andres, Luis
  • Foster, Vivien
  • Guasch, Jose Luis
Registered author(s):

    Abstract

    The authors analyze the impact of privatization on the performance of 116 electric utilities in 10 Latin American countries. The analysis makes a number of contributions to the literature on changes in infrastructure ownership. First, this is the first systemic analysis of the impact of privatization on the distribution of the electricity sector. Second, it constructs an unbalanced panel data set of key indicators for each country. Third, it includes a broader-than in past studies-range of indicators, such as output, employment, productivity, efficiency, quality, coverage, and prices, offering a fuller picture of the effects of privatization on consumers. Fourth, this research covers a longer period of time, and evaluates three stages-before, transition, and after-allowing for the identification of the short- and long-run effects of privatization, as opposed to previous analyses'short time series data that do not identify long-run outcomes. Finally, the counterfactual is considered through the analysis in trends. The authors apply two different methodologies. The first methodology uses means and medians from each period and tests the significance of the changes between periods. The second methodology consists of an econometric model that captures firm fixed effects, firm-specific time trends, and heteroscedasticity corrections. When needed, the authorsused firm-specific time trends to better understand the outcomes. The results suggest that changes in ownership generate significant improvements in labor productivity, efficiency, and product and service quality, and that most of those changes occur in the transition period. Improvements in the post transition period-beyond two years after the change in ownership-are much more modest.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2006/06/01/000016406_20060601162807/Rendered/PDF/wps3936.pdf
    Download Restriction: no

    Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3936.

    as
    in new window

    Length:
    Date of creation: 01 Jun 2006
    Handle: RePEc:wbk:wbrwps:3936
    Contact details of provider: Postal:
    1818 H Street, N.W., Washington, DC 20433

    Phone: (202) 477-1234
    Web page: http://www.worldbank.org/
    Email:


    More information through EDIRC

    Keywords: Economic Theory&Research; Energy Production and Transportation; Public Sector Economics&Finance; Labor Markets; Science Education;

    This paper has been announced in the following NEP Reports:

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    as
    in new window


    1. OKTEN Cagla & ARIN Peren, "undated". "How Does Privatization Affect Efficiency, Productivity and Technology Choice? Evidence from Turkey," EcoMod2003 330700115, EcoMod.
    2. Boardman, Anthony E & Vining, Aidan R, 1989. "Ownership and Performance in Competitive Environments: A Comparison of the Performance of Private, Mixed, and State-Owned Enterprises," Journal of Law and Economics, University of Chicago Press, vol. 32(1), pages 1-33, April.
    3. Alberto Chong & Florencio de, 2003. "The Truth about Privatization in Latin America," Yale School of Management Working Papers ysm436, Yale School of Management.
    4. Ros, Agustin J. & Banerjee, Aniruddha, 2000. "Telecommunications privatization and tariff rebalancing: evidence from Latin America," Telecommunications Policy, Elsevier, vol. 24(3), pages 233-252, April.
    5. Chong, Alberto & Lopez-de-Silanes, Florencio, 2002. "Privatization and labor force restructuring around the world," Policy Research Working Paper Series 2884, The World Bank.
    6. Wallsten, Scott, 2002. "Does sequencing matter? regulation and privatization in telecommunications reforms," Policy Research Working Paper Series 2817, The World Bank.
    7. Antonio Estache & Marco Manacorda & Tommaso M. Valletti, 2002. "Telecommunications Reform, Access Regulation, and Internet Adoption in Latin America," ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, vol. 0(Spring 20), pages 153-218, January.
    8. Ehrlich, Isaac & Georges Gallais-Hamonno & Zhiqiang Liu & Randall Lutter, 1994. "Productivity Growth and Firm Ownership: An Analytical and Empirical Investigation," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 1006-1038, October.
    9. Megginson, William L & Nash, Robert C & van Randenborgh, Matthias, 1994. " The Financial and Operating Performance of Newly Privatized Firms: An International Empirical Analysis," Journal of Finance, American Finance Association, vol. 49(2), pages 403-452, June.
    10. Chisari, Omar & Estache, Antonio & Romero, Carlos, 1997. "Winners and losers from utility privatization in Argentina : lessons from a general equilibrium model," Policy Research Working Paper Series 1824, The World Bank.
    11. Estache, Antonio & Rodriguez-Pardina, Martin, 1999. "Light and lightning at the end of the public tunnel : reform of the electricity sector in the Southern Cone," Policy Research Working Paper Series 2074, The World Bank.
    12. Rafael La Porta & Florencio López-de-Silanes, 1999. "The Benefits of Privatization: Evidence from Mexico," The Quarterly Journal of Economics, Oxford University Press, vol. 114(4), pages 1193-1242.
    13. Jeffry M. Netter & William L. Megginson, 2001. "From State to Market: A Survey of Empirical Studies on Privatization," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 321-389, June.
    14. Paul Joskow, 2003. "Electricity Sector Restructuring and Competition: Lessons Learned," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 40(121), pages 548-558.
    15. Sebastian Galiani & Paul Gertler & Ernesto Schargrodsky, 2005. "Water for Life: The Impact of the Privatization of Water Services on Child Mortality," Journal of Political Economy, University of Chicago Press, vol. 113(1), pages 83-120, February.
    16. Saal, David S & Parker, David, 2001. "Productivity and Price Performance in the Privatized Water and Sewerage Companies of England and Wales," Journal of Regulatory Economics, Springer, vol. 20(1), pages 61-90, July.
    17. Estache, Antonio & Rossi, Martin, 2004. "Have consumers benefited from the reforms in the electricity distribution sector in Latin America?," Policy Research Working Paper Series 3420, The World Bank.
    18. Roman Frydman & Cheryl Gray & Marek Hessel & Andrzej Rapaczynski, 1999. "When Does Privatization Work? The Impact of Private Ownership on Corporate Performance in the Transition Economies," The Quarterly Journal of Economics, Oxford University Press, vol. 114(4), pages 1153-1191.
    19. Heckman, James J. & Robb, Richard Jr., 1985. "Alternative methods for evaluating the impact of interventions : An overview," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 239-267.
    20. Ros, Agustin J, 1999. "Does Ownership or Competition Matter? The Effects of Telecommunications Reform on Network Expansion and Efficiency," Journal of Regulatory Economics, Springer, vol. 15(1), pages 65-92, January.
    21. Wallsten, Scott J, 2001. "An Econometric Analysis of Telecom Competition, Privatization, and Regulation in Africa and Latin America," Journal of Industrial Economics, Wiley Blackwell, vol. 49(1), pages 1-19, March.
    22. Manuel Dussan, 1996. "Electric Power Sector Reform in Latin America and the Caribbean," IDB Publications (Working Papers) 46878, Inter-American Development Bank.
    Full references (including those not matched with items on IDEAS)

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

    as
    in new window


    Cited by:

    1. Auriol, Emmanuelle & Blanc, Aymeric, 2009. "Capture and corruption in public utilities: The cases of water and electricity in Sub-Saharan Africa," Utilities Policy, Elsevier, vol. 17(2), pages 203-216, June.
    2. Riham Shendy & Zachary Kaplan & Peter Mousley, 2011. "Toward Better Infrastructure : Conditions, Constraints, and Opportunities in Financing Public-Private Partnerships in Select African Countries," World Bank Publications, The World Bank, number 2331, July.
    3. Nakhoda, Aadil, 2014. "The impact of electricity constraints on access to finance: A firm-level study," MPRA Paper 59507, University Library of Munich, Germany.
    4. Estache, Antonio & Rossi, Martin A., 2008. "Regulatory agencies : impact on firm performance and social welfare," Policy Research Working Paper Series 4509, The World Bank.
    5. Eduardo Martínez Chombo, 2009. "Sources of Over-Costs and Distortions in State-Owned Utilities in Mexico," Working Papers 2009-07, Banco de México.
    6. Daniel Chiquiar & Manuel Ramos Francia, 2009. "Competitiveness and Growth of the Mexican Economy," Working Papers 2009-11, Banco de México.
    7. Andres, Luis & Guasch, Jose Luis & Azumendi, Sebastian Lopez, 2008. "Regulatory governance and sector performance : methodology and evaluation for Electricity distribution in Latin America," Policy Research Working Paper Series 4494, The World Bank.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Access and download statistics

    When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:3936. 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)

    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 references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link 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 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.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.