Utility Privatization and Regulation

Utility Privatization and Regulation

A Fair Deal for Consumers?

Edited by Cecilia Ugaz

The authors address the question of infrastructure reforms in a novel way by focusing on the impact which they can have on consumers through the prices paid by different groups and on their access to the networks. They analyse original material from four Latin American countries – Argentina, Bolivia, Chile, Peru – and two European countries – Spain and the UK. Access is especially relevant when considering immature systems which have not yet extended to cover the majority of the population, as is the case in many Latin American countries. The authors also address the widespread impact of privatization on the economy (via macroeconomic influences) and the more general issues of subsidies and regulation which are endemic to these industries. The book focuses on the reform of four sectors: telecommunications, electricity, gas, and water and sanitation.

Chapter 3: Access to utilities by the poor: a global perspective

Kristin Komives, Dale Whittington and Xun Wu

Subjects: development studies, development economics, economics and finance, development economics, public sector economics


Kristin Komives, Dale Whittington and Xun Wu 1. INTRODUCTION This chapter presents a global perspective on infrastructure coverage and the poor that many people will think they have seen before but in fact have not.1 It is widely assumed that the poor in developing countries have fewer infrastructure services than middle and upper income households, but there is surprisingly little information on the actual empirical relationship between household income and infrastructure service coverage in different countries. The available coverage statistics are typically country-wide averages. These are widely used to assess the scope and magnitude of infrastructure problems in developing countries, and they are often the only global, cross-country data available about infrastructure services. When such coverage statistics reveal that many households do not have service (that is, are ‘not covered’), it is generally assumed that such households are poor. Global coverage statistics are often compiled by international organizations such as the World Health Organization and the World Bank, and have profoundly shaped the way many people conceptualize infrastructure policy problems. Coverage data can aid in the description of an existing infrastructure situation, but they cannot be used to determine why such a situation exists, even if one were able to go back to the original datasets. This is because most surveys on which the coverage summaries are based do not ask respondents what services they could have chosen (but did not) and the attributes of such service options (such as price, quality, reliability). What we see in the coverage...

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