WBI Development Studies

2004-01, Guasch, J. Luis

In most developing and industrial countries, infrastructure services have traditionally been provided by government enterprises, but in developing countries at least, these enterprises have often proven to be inefficient, unable to provide much-needed investments, and manipulated to achieve political objectives. By contrast, many studies have shown that over the past 30 years, private (or privatized) enterprises in developing countries have, on average, delivered superior performance and needed investments. Explanations differ on why this discrepancy exists. Private enterprises are driven by a desire for profits and may have more professional know-how in management, operating procedures, and use of appropriate technology. But perhaps the most important reason for their stronger performance is that privatization makes intervening in enterprise operations difficult for governments and politicians, so government manipulation is less likely. However, the issue, in general, has been how to ensure that the improved performance and efficiency gains are passed through to the users through lower tariffs and increased coverage, while allowing firms to earn a fair rate of return on their investments.

2000-06, Estache, Antonio, De Rus, Gines, Estache, Antonio, De Rus, Gines

The 1990s saw a dramatic increase in the liberalization of transport policies and a strengthening of the role played by private operators and investors in transport infrastructure. Most of these reforming countries are creating new regulatory agencies. This book aims is to contribute to the development of these regulatory skills. The book has two parts. Chapter 2 in the first part provides an overview of why economic regulation is important. It provides theoretical support to the sector-specific chapters that constitute the second part of the book. The second part covers four subsectors: airports, ports, railways, and roads. Each chapter follows exactly the same structure. The first section provides snapshot of the key economic characteristics of the sector and discusses their relevance from the viewpoint of a regulator. The second section summarizes the main privatization and regulation trends that have been observed in the sector. It gives an overview of main options offered by international experience and covers a few case studies that illustrate those options. The third section covers price regulation and highlights the price-related issues that characterize the sector. The fourth section does the same for quality regulation. The fifth section discusses the main performance indicators that the sector's regulators should be able to rely on to be effective in their jobs.