Low-level versus high-level equilibrium in public utility service
Heterogeneity of public utility services is common in developing countries. In a"high-level"equilibrium, the quality of utility services is high, consumer willingness to pay for services is high, the utility is well funded and staff well paid in order to induce high quality of performance. In a"low-level"equilibrium the opposite is the case. Which alternative occurs depends on both the quality of utility management, and public perceptions about service quality. If a utility administration has the potential to offer high-quality service, and the public is aware of this, high-quality equilibrium also requires the public’s service payments to be high enough to fund the needed pay incentives for the utility staff. When the public lack knowledge about the utility administration’s quality, the public’s initial beliefs about the utility administration’s quality also will influence their willingness to make adequate service payments for a high-quality equilibrium. This paper shows that, with low confidence, only a low-level equilibrium may exist; while with higher initial confidence, a high-level equilibrium become possible."Intermediate"(in between the low- and high-level) outcomes also can occur in early periods, with"high-level"outcomes later on.
|Date of creation:||01 Jun 2011|
|Date of revision:|
|Contact details of provider:|| Postal: 1818 H Street, N.W., Washington, DC 20433|
Phone: (202) 477-1234
Web page: http://www.worldbank.org/
More information through EDIRC
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.:
- Strand, Jon & Walker, Ian, 2005. "Water markets and demand in Central American cities," Environment and Development Economics, Cambridge University Press, vol. 10(03), pages 313-335, June.
- Pranab Bardhan & Dilip Mookherjee, 2006. "Decentralisation and Accountability in Infrastructure Delivery in Developing Countries," Economic Journal, Royal Economic Society, vol. 116(508), pages 101-127, 01.
- Antonio Estache & Jean-Jacques Laffont & Xinzhu Zhang, 2006.
"Universal Service Obligations in LDCs: The Effect of Uniform Pricing on Infrastructure Access,"
ULB Institutional Repository
2013/43913, ULB -- Universite Libre de Bruxelles.
- Estache, Antonio & Laffont, Jean-Jacques & Zhang, Xinzhu, 2006. "Universal service obligations in LDCs: The effect of uniform pricing on infrastructure access," Journal of Public Economics, Elsevier, vol. 90(6-7), pages 1155-1179, August.
- World Bank, 2010. "Deep Wells and Prudence : Towards Pragmatic Action for Addressing Groundwater Overexploitation in India," World Bank Other Operational Studies 2835, The World Bank.
- Raghabendra Chattopadhyay & Esther Duflo, 2004.
"Women as Policy Makers: Evidence from a Randomized Policy Experiment in India,"
Econometric Society, vol. 72(5), pages 1409-1443, 09.
- Esther Duflo & Raghabendra Chattopadhyay, 2004. "Women as policy makers: Evidence from a randomized policy experiment in india," Framed Field Experiments 00224, The Field Experiments Website.
- Estache, Antonio & Fay, Marianne, 2007. "Current debates on infrastructure policy," Policy Research Working Paper Series 4410, The World Bank.
- David Kreps & Robert Wilson, 1999.
"Reputation and Imperfect Information,"
Levine's Working Paper Archive
238, David K. Levine.
- David Backus & John Driffill, 1985. "Rational Expectations and Policy Credibility Following a Change in Regime," Review of Economic Studies, Oxford University Press, vol. 52(2), pages 211-221.
- World Bank, 2009. "Understanding Sector Performance : The Case of Utilities in Latin America and the Caribbean," World Bank Other Operational Studies 3170, The World Bank.
- Khemani, Stuti, 2010. "Political economy of infrastructure spending in India," Policy Research Working Paper Series 5423, The World Bank.
- NAUGES CÃ©line & STRAND Jon, 2006.
"The Value of Water Connections in Central American Cities: A Revealed Preference Study,"
LERNA Working Papers
06.23.216, LERNA, University of Toulouse.
- Nauges, Céline & Strand, Jon & Walker, Ian, 2009. "The value of water connections in Central American cities: a revealed preference study," Environment and Development Economics, Cambridge University Press, vol. 14(03), pages 349-370, June.
- Paul Milgrom & John Roberts, 1980.
"Predation, Reputation, and Entry Deterrence,"
427, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Timothy Besley & Rohini Pande & Lupin Rahman & Vijayendra Rao, 2004. "The Politics of Public Good Provision: Evidence from Indian Local Governments," Journal of the European Economic Association, MIT Press, vol. 2(2-3), pages 416-426, 04/05.
- Nauges, Celine & Strand, Jon, 2007. "Estimation of non-tap water demand in Central American cities," Resource and Energy Economics, Elsevier, vol. 29(3), pages 165-182, September.
When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:5723. 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 references are entirely missing, you can add them using this form.