José Delﬁno and Ariel Casarin 1. INTRODUCTION The privatization of the national public utilities that took place almost a decade ago in Argentina seems to be explained by the persisting deﬁcits of the enterprises, a general dissatisfaction with their performance and the diﬃculties government faced in their control. Furthermore, several macroeconomic imbalances, such as hyperinﬂation, declining economic activity and large ﬁscal deﬁcits (to a great extent explained by public utilities losses), placed privatization at the centre of a broader programme of structural reforms. This critical economic situation had two important consequences. On the one hand, it put pressure on the privatization process by constraining public policies. This translated into weak regulatory mechanisms that initially ignored the market structures emerging as a consequence of privatization (although more rigid regulations were adopted later and competition was encouraged by splitting up the utilities being privatized). On the other hand, the prevailing economic situation of the country prompted signiﬁcant tariﬀ increases during the pre-privatization period and the progressive elimination of cross-subsidies. Both measures were intended to achieve more cost-reﬂective prices in order to ensure private operators a reasonable rate of return. The purpose of this study is to assess the welfare changes and the distributional impact associated with the privatization of telecommunications, electricity, natural gas, and water and sewerage services of the Gran Buenos Aires area. It is interesting to focus the analysis on Buenos Aires because it is the site of the earliest reforms and also...
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