Powering up developing countries through integration ?
Power market integration is analyzed in a two-country model with nationally regulated firms and costly public funds. If the generation costs between the two countries are too similar, negative business stealing outweighs efficiency gains so that the subsequent integration welfare decreases in both regions. Integration is welfare enhancing when the cost difference between two regions is large enough. The benefits from export profits increase the total welfare in the exporting country, whereas the importing country benefits from lower prices. In this case, market integration also improves incentives to invest compared to autarky. The investment levels remain inefficient, however, especially for transportation facilities. Free riding reduces incentives to invest in these public-good components of the network, whereas business stealing tends to decrease the capacity to finance new investment.
|Date of creation:||01 Jun 2013|
|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
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.:
- Leahy, Dermot & Neary, J Peter, 2007.
"Multilateral Subsidy Games,"
CEPR Discussion Papers
6479, C.E.P.R. Discussion Papers.
- Neary, James Peter, 1991.
"Cost asymmetries in international subsidy games: Should governments help winners or losers?,"
Discussion Papers, Series II
147, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".
- Neary, J. Peter, 1994. "Cost asymmetries in international subsidy games: Should governments help winners or losers?," Journal of International Economics, Elsevier, vol. 37(3-4), pages 197-218, November.
- Neary, J Peter, 1991. "Cost Asymmetries in International Subsidy Games: Should Governments Help Winners or Losers?," CEPR Discussion Papers 560, C.E.P.R. Discussion Papers.
- J. Peter Neary, 1990. "Cost asymmetries in international subsidy games : should governments help winners or losers?," Working Papers 199008, School of Economics, University College Dublin.
- Timothy Besley & Maitreesh Ghatak, 2001.
"Government Versus Private Ownership of Public Goods,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 116(4), pages 1343-1372.
- Besley, Timothy J. & Ghatak, Maitreesh, 2001. "Government versus Private Ownership of Public Goods," CEPR Discussion Papers 2725, C.E.P.R. Discussion Papers.
- Auriol, Emmanuelle, 1998.
"Deregulation and quality,"
International Journal of Industrial Organization,
Elsevier, vol. 16(2), pages 169-194, March.
- Pineau, Pierre-Olivier & Hira, Anil & Froschauer, Karl, 2004. "Measuring international electricity integration: a comparative study of the power systems under the Nordic Council, MERCOSUR, and NAFTA," Energy Policy, Elsevier, vol. 32(13), pages 1457-1475, September.
- Emmanuelle Auriol & Pierre M. Picard, 2008.
"Infrastructure and Public Utilities Privatization in Developing Countries,"
World Bank Economic Review,
World Bank Group, vol. 23(1), pages 77-100, November.
- Auriol, Emmanuelle & Picard, Pierre M, 2006. "Infrastructure and Public Utilities Privatization in Developing Countries," CEPR Discussion Papers 6018, C.E.P.R. Discussion Papers.
- Auriol, Emmanuelle & Picard, Pierre M., 2006. "Infrastructure and public utilities privatization in developing countries," Policy Research Working Paper Series 3950, The World Bank.
- AURIOL, Emmanuelle & PICARD, Pierre M., . "Infrastructure and public utilities privatization in developing countries," CORE Discussion Papers RP 2180, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Estache, Antonio & Perelman, Sergio & Trujillo, Lourdes, 2005. "Infrastructure performance and reform in developing and transition economies: evidence from a survey of productivity measures," Policy Research Working Paper Series 3514, The World Bank.
- Estache, Antonio & Iimi, Atsushi, 2008.
"Procurement efficiency for infrastructure development and financial needs reassessed,"
Policy Research Working Paper Series
4662, The World Bank.
- Antonio Estache & A. Iimi, 2008. "Procurement Efficiency for Infrastructure Development and Financial Needs Reassessed," Working Papers ECARES 2008_022, ULB -- Universite Libre de Bruxelles.
- Caillaud, Bernard, 1990. "Regulation, competition, and asymmetric information," Journal of Economic Theory, Elsevier, vol. 52(1), pages 87-110, October.
- Snow, Arthur & Warren, Ronald Jr., 1996. "The marginal welfare cost of public funds: Theory and estimates," Journal of Public Economics, Elsevier, vol. 61(2), pages 289-305, August.
- Collie, David R., 2000. "State aid in the European Union: The prohibition of subsidies in an integrated market," International Journal of Industrial Organization, Elsevier, vol. 18(6), pages 867-884, August.
When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:6494. 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.