Irwin, Timothy Cressey

Fiscal Affairs Department, International Monetary Fund
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Fiscal Affairs Department, International Monetary Fund
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Last updated January 31, 2023
Tim Irwin worked at the World Bank from 1995 to 2008, on among other things the regulation of utilities and the link between public financial management and privately financed infrastructure projects.

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Now showing 1 - 4 of 4
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    Price Structures, Cross-Subsidies, and Competition in Infrastructure
    (World Bank, Washington, DC, 1997-02) Irwin, Timothy
    Governments often regulate not only the overall level of prices charged by infrastructure firms but also the relationship between prices for different services or customers. Prices can differ among different types of customers, even when no customers can be said to be subsidizing another, for example, when one asset is used to supply a service to two or more groups of customers. One of the hurdles that governments must overcome in introducing competition in infrastructure is dealing with the social and political implications of changing price structures, or rate rebalancing. Generally, competition should reduce overall costs in the sector, lessening the need to compensate groups hurt by price increases resulting from rate rebalancing. But if the efficiency gains are not enough to offset the price increases for some groups and the government is worried about the political and social costs of rate balancing, it has three basic options: 1) preserving the old price structure; 2) funding price subsidies from general tax revenue rather than from transfers within the firm or industry; and 3) relying on social safety nets rather than price subsidies. Whichever option a government chooses should stand up against the following four tests: 1) Do subsidies reach the people the government most wants to support? 2) are the costs clear and measurable? 3) Are the administrative costs as low as possible? 4) Is the revenue raised from the source that entails the least cost to the economy? This Note looks at the three options in practice and reviews how they measure up against the four criteria. It concludes that governments should eliminate price subsidies if politically feasible. But even if they cannot, they can still reap the benefits of competition.
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    Price Caps, Rate-of-Return Regulation, and the Cost of Capital
    (World Bank, Washington, DC, 1997-09) Alexander, Ian ; Irwin, Timothy
    This Note compares the effects of price cap and rate-of-return regulation on the risk borne by regulated utilities. It present evidence that price cap regulation subjects firms to greater risks and therefore raises their cost of capital. This result has one clear implication: firms regulated by price caps must be permitted to earn higher returns. If they are not, they will be unable to attract new investment capital and the quality of their service will decline.
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    Regulating Water Companies
    (World Bank, Washington, DC, 1996-05) Klein, Michael ; Irwin, Timothy
    The water industry differs in two key respects from such other network industries as gas, electricity, and telecommunications. First, it offers fewer opportunities for competition among suppliers, since the network of pipes accounts for a large part of the total cost of water and can be run efficiently only as a monopoly. Second, the quality of water is crucial but hard for consumers to check. So, to get the best performance out of water companies, governments need to regulate the price and quality of water. To do that job well, regulators must know the appropriate price. The authors explain that the best way to discover this price is to auction the right to supply water.
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    Privatizing Infrastructure : Capital Market Pressures and Management Incentives
    (World Bank, Washington, DC, 1996-10) Irwin, Timothy ; Alexander, Ian
    The authors propose a number of privatization rules to ensure that management will improve after privatization. Governments should ensure that the privatized sector has several firms operating in industries that are local natural monopolies, so that if one operator goes bankrupt, another can readily take over. Governments should also permit concentrated ownership and foreign ownership, and profits should not be guaranteed through regulation.