Publication: Infrastructure Performance and Reform in Developing and Transition Economies : Evidence from a Survey of Productivity Measures
Loading...
Date
2005-02
ISSN
Published
2005-02
Editor(s)
Abstract
The authors review about 80 studies on electricity and gas, water and sanitation, and rail and ports (with a footnote on telecommunications) in developing countries. The main policy lesson is that there is a difference in the relevance of ownership for efficiency between utilities and transport in developing countries. In transport, private operators have tended to perform better than public operators. For utilities, ownership often does not matter as much as sometimes argued. Most cross-country studies find no statistically significant difference in efficiency scores between public and private providers. As for the country-specific studies, some do find differences in performance over time but these differences tend to matter much less than a large number of other variables. Across sectors, private operators functioning in a competitive environment or regulated under price caps or hybrid regulatory regimes tend to catch up best practice faster than public operators. There is a very strong case to push regulators in developing and transition economies toward a more systematic reliance on yardstick competition in a sector in which residual monopoly powers tend to be common.
Link to Data Set
Citation
“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; No. 3514. © World Bank. http://hdl.handle.net/10986/8844 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Publication Geopolitics and the World Trading System(Washington, DC: World Bank, 2024-12-23)Until the beginning of this century, the GATT/WTO system worked. Economic research provided a compelling explanation. It showed that if governments maximize the well-being of their own countries broadly defined, GATT/WTO principles would facilitate mutually beneficial cooperation over their trade policy choices. Now heightened geopolitical rivalry seems to have undermined the WTO. A simple transposition of the previous rationalization suggests that geopolitics and trade cooperation are not compatible. The paper shows that this is only true if rivalry eclipses any consideration of own-country well-being. In all other circumstances, there are gains from trade cooperation even with geopolitics. Furthermore, the WTO’s relevance is in question only if it adheres too rigidly to its existing rules and norms. Through measured adaptation to the geopolitical imperative, the WTO can continue to thrive as a forum for multilateral trade cooperation in the age of geopolitics.Publication The Macroeconomic Implications of Climate Change Impacts and Adaptation Options(Washington, DC: World Bank, 2025-05-29)Estimating the macroeconomic implications of climate change impacts and adaptation options is a topic of intense research. This paper presents a framework in the World Bank's macrostructural model to assess climate-related damages. This approach has been used in many Country Climate and Development Reports, a World Bank diagnostic that identifies priorities to ensure continued development in spite of climate change and climate policy objectives. The methodology captures a set of impact channels through which climate change affects the economy by (1) connecting a set of biophysical models to the macroeconomic model and (2) exploring a set of development and climate scenarios. The paper summarizes the results for five countries, highlighting the sources and magnitudes of their vulnerability --- with estimated gross domestic product losses in 2050 exceeding 10 percent of gross domestic product in some countries and scenarios, although only a small set of impact channels is included. The paper also presents estimates of the macroeconomic gains from sector-level adaptation interventions, considering their upfront costs and avoided climate impacts and finding significant net gross domestic product gains from adaptation opportunities identified in the Country Climate and Development Reports. Finally, the paper discusses the limits of current modeling approaches, and their complementarity with empirical approaches based on historical data series. The integrated modeling approach proposed in this paper can inform policymakers as they make proactive decisions on climate change adaptation and resilience.Publication Global Poverty Revisited Using 2021 PPPs and New Data on Consumption(Washington, DC: World Bank, 2025-06-05)Recent improvements in survey methodologies have increased measured consumption in many low- and lower-middle-income countries that now collect a more comprehensive measure of household consumption. Faced with such methodological changes, countries have frequently revised upward their national poverty lines to make them appropriate for the new measures of consumption. This in turn affects the World Bank’s global poverty lines when they are periodically revised. The international poverty line, which is based on the typical poverty line in low-income countries, increases by around 40 percent to $3.00 when the more recent national poverty lines as well as the 2021 purchasing power parities are incorporated. The net impact of the changes in international prices, the poverty line, and new survey data (including new data for India) is an increase in global extreme poverty by some 125 million people in 2022, and a significant shift of poverty away from South Asia and toward Sub-Saharan Africa. The changes at higher poverty lines, which are more relevant to middle-income countries, are mixed.Publication From Patriarchy to Policy(Washington, DC: World Bank, 2025-05-29)Legal institutions play an important role in shaping gender equality in economic domains, from inheritance to labor markets. But where do gender equal laws come from? Using cross-country data on social norms and legal equality, this paper investigates the socio-cultural roots of gender inequity in the legal system and its implications for female labor force participation. To identify the impact of social norms, the analysis uses an empirical strategy that exploits pre-modern differences in ancestral patriarchal culture as an instrument for present-day gender norms. The findings show that ancestral patriarchal culture is a strong predictor of contemporary norms, and conservative social norms are associated with more gender inequality in the de jure legal framework, the de facto implementation of laws, and the labor market. The paper presents evidence for a political selection mechanism linking norms to laws: countries with more conservative norms elect political leaders who are more hostile to gender equality, who then pass less progressive legislation. The results highlight the cultural roots and political drivers of legalized gender inequality.Publication Global Socio-economic Resilience to Natural Disasters(Washington, DC: World Bank, 2025-05-22)Most disaster risk assessments use damages to physical assets as their central metric, often neglecting distributional impacts and the coping and recovery capacity of affected people. To address this shortcoming, the concepts of well-being losses and socio-economic resilience—the ability to experience asset losses without a decline in well-being—have been proposed. This paper uses microsimulations to produce a global estimate of well-being losses from, and socio-economic resilience to, natural disasters, covering 132 countries. On average, each $1 in disaster-related asset losses results in well-being losses equivalent to a $2 uniform national drop in consumption, with significant variation within and across countries. The poorest income quintile within each country incurs only 9% of national asset losses but accounts for 33% of well-being losses. Compared to high-income countries, low-income countries experience 67% greater well-being losses per dollar of asset losses and require 56% more time to recover. Socio-economic resilience is uncorrelated with exposure or vulnerability to natural hazards. However, a 10 percent increase in GDP per capita is associated with a 0.9 percentage point gain in resilience, but this benefit arises indirectly—such as through higher rate of formal employment, better financial inclusion, and broader social protection coverage—rather than from higher income itself. This paper assess ten policy options and finds that socio-economic and financial interventions (such as insurance and social protection) can effectively complement asset-focused measures (e.g., construction standards) and that interventions targeting low-income populations usually have higher returns in terms of avoided well-being losses per dollar invested.
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication A Primer on Efficiency Measurement for Utilities and Transport Regulators(Washington, DC: World Bank, 2003-01)This book is intended to help regulators learn about the tools needed to measure efficiency. It is based on lecture notes from courses the World Bank Institute offers in English, French and Spanish throughout the developing world and has benefited from feedback received during those courses. It provides an overview of the various dimensions of efficiency that regulators should be concerned with. It also summarizes the main quantification techniques available to facilitate decisions in the most common regulatory processes. The issues covered should be of particular interest to those policymakers and regulators interested in measuring relative efficiency and in implementing any incentive-based regulatory mechanism that requires the measurement of efficiency, such as price caps, revenue caps, or yardstick competition. The book focuses on methodology selection, data collection, and related issues. It provides readers with all the conceptual tools they need to make real-life decisions. It is also supported by a web site from which readers can download software they can use to implement the techniques described.Publication Sector Organization, Governance, and the Inefficiency of African Water Utilities(World Bank, Washington, DC, 2002-09)The authors analyze the determinants of the efficiency levels reached by twenty one African water utilities. They assess efficiency through the estimation of a production frontier for the sector in Africa. The efficiency estimates confirm much of the common perceptions from partial productivity indicators. They point to a great heterogeneity in the African water utilities' performances, the predominance of constant returns to scale, and the great rate of technological progress. And the authors show that the institutional capacity of the country, as well as its governance quality, are significant driving factors in the performance of each firm.Publication Electricity Sector Reform in Developing Countries : A Survey of Empirical Evidence on Determinants and Performance(World Bank, Washington, DC, 2005-03)Driven by ideology, economic reasoning, and early success stories, vast amounts of financial resources and effort have been spent on reforming infrastructure industries in developing countries. It is therefore important to examine whether evidence supports the logic of reforms. The authors review the empirical evidence on electricity reform in developing countries. They find that country institutions and sector governance play an important role in the success and failure of reform. And reforms also appear to have increased operating efficiency and expanded access to urban customers. However, the reforms have to a lesser degree passed on efficiency gains to customers, tackled distributional effects, and improved rural access. Moreover, some of the literature is not methodologically robust and on par with general development economics literature. Further, findings on some issues are limited and inconclusive, while other important areas are yet to be addressed. Until we know more, implementation of reforms will be more based on ideology and economic theory rather than solid economic evidence.Publication Price Caps, Efficiency Payoffs, and Infrastructure Contract Renegotiation in Latin America(World Bank, Washington, DC, 2003-08)Twenty years ago, as the United Kingdom was getting ready to launch the privatization of its public services, Professor Littlechild developed and operationalized the concept of price caps as a regulatory regime to control for residual monopoly conditions in those services. Ten years later, Latin American countries, as they embarked into their own infrastructure reforms, also adopted the price cap regulatory model. Relying on a large data base on the factors driving contract renegotiation in the region and a survey of the literature on efficiency gains, the authors assess the impact of this regulatory regime in Latin America. They show that while the expected efficiency gains were amply achieved, these gains were seldom passed on to the users. Instead they were shared by the government and the firms. Moreover, the adoption of price caps implied higher costs of capital and hence, tariffs, and brought down levels of investment.Publication Forecasting the Demand for Privatized Transport : What Economic Regulators Should Know, and Why(World Bank, Washington, DC, 2000-09)Forecasting has long been a challenge, and will remain so for the foreseeable future. But the analytical instruments and data processing capabilities available through the latest technology, and software, should allow much better forecasting than transport ministries, or regulatory agencies typically observe. Privatization brings new needs for demand forecasting. More attention is paid to risk under privatization, than when investments are publicly financed. And regulators must be able to judge traffic studies done by operators, and to learn what strategic behavior influenced these studies. Many governments, and regulators avoid good demand, modeling out of lack of conviction that theory, and models can do better than the "old hands" of the sector. This is dangerous when privatization changes the nature of business. For projects amounting to investments of $ 100-200 million, a cost of $ 100,000-200,000 is not a reason to reject a reasonable modeling effort. And some private forecasting firms are willing to sell guarantees, or insurance with their forecasts, to cover significant gaps between forecasts, and reality.
Users also downloaded
Showing related downloaded files
Publication Poverty and Shared Prosperity 2016(Washington, DC: World Bank, 2016-10-02)Poverty and Shared Prosperity 2016 is the first of an annual flagship report that will inform a global audience comprising development practitioners, policy makers, researchers, advocates, and citizens in general with the latest and most accurate estimates on trends in global poverty and shared prosperity. This edition will also document trends in inequality and identify recent country experiences that have been successful in reducing inequalities, provide key lessons from those experiences, and synthesize the rigorous evidence on public policies that can shift inequality in a way that bolsters poverty reduction and shared prosperity in a sustainable manner. Specifically, the report will address the following questions: • What is the latest evidence on the levels and evolution of extreme poverty and shared prosperity? • Which countries and regions have been more successful in terms of progress toward the twin goals and which are lagging behind? • What does the global context of lower economic growth mean for achieving the twin goals? • How can inequality reduction contribute to achieving the twin goals? • What does the evidence show concerning global and between- and within-country inequality trends? • Which interventions and countries have used the most innovative approaches to achieving the twin goals through reductions in inequality? The report will make four main contributions. First, it will present the most recent numbers on poverty, shared prosperity, and inequality. Second, it will stress the importance of inequality reduction in ending poverty and boosting shared prosperity by 2030 in a context of weaker growth. Third, it will highlight the diversity of within-country inequality reduction experiences and will synthesize experiences of successful countries and policies, addressing the roots of inequality without compromising economic growth. In doing so, the report will shatter some myths and sharpen our knowledge of what works in reducing inequalities. Finally, it will also advocate for the need to expand and improve data collection—for example, data availability, comparability, and quality—and rigorous evidence on inequality impacts in order to deliver high-quality poverty and shared prosperity monitoring.Publication Poverty and Shared Prosperity 2020(Washington, DC: World Bank, 2020-10-07)Previous Poverty and Shared Prosperity Reports have conveyed the difficult message that the world is not on track to meet the global goal of reducing extreme poverty to 3 percent by 2030. This edition brings the unwelcome news that COVID-19, along with conflict and climate change, has not merely slowed global poverty reduction but reversed it for first time in over twenty years. With COVID-19 predicted to push up to 100 million additional people into extreme poverty in 2020, trends in global poverty rates will be set back at least three years over the next decade. Today, 40 percent of the global poor live in fragile or conflict-affected situations, a share that could reach two-thirds by 2030. Multiple effects of climate change could drive an estimated 65 to 129 million people into poverty in the same period. “Reversing the reversal” will require responding effectively to COVID-19, conflict, and climate change while not losing focus on the challenges that most poor people continue to face most of the time. Though these are distinctive types of challenges, there is much to be learned from the initial response to COVID-19 that has broader implications for development policy and practice, just as decades of addressing more familiar development challenges yield insights that can inform responses to today’s unfamiliar but daunting ones. Solving novel problems requires rapid learning, open cooperation, and strategic coordination by everyone: from political leaders and scientists to practitioners and citizens.Publication Doing Business 2020(Washington, DC: World Bank, 2020)Doing Business 2020 is the 17th in a series of annual studies investigating the regulations that enhance business activity and those that constrain it. It provides quantitative indicators covering 12 areas of the business environment in 190 economies. The goal of the Doing Business series is to provide objective data for use by governments in designing sound business regulatory policies and to encourage research on the important dimensions of the regulatory environment for firms.Publication Poverty and Shared Prosperity 2018(Washington, DC: World Bank, 2018-10-17)The World Bank Group has two overarching goals: End extreme poverty by 2030 and promote shared prosperity by boosting the incomes of the bottom 40 percent of the population in each economy. As this year’s Poverty and Shared Prosperity report documents, the world continues to make progress toward these goals. In 2015, approximately one-tenth of the world’s population lived in extreme poverty, and the incomes of the bottom 40 percent rose in 77 percent of economies studied. But success cannot be taken for granted. Poverty remains high in Sub- Saharan Africa, as well as in fragile and conflict-affected states. At the same time, most of the world’s poor now live in middle-income countries, which tend to have higher national poverty lines. This year’s report tracks poverty comparisons at two higher poverty thresholds—$3.20 and $5.50 per day—which are typical of standards in lower- and upper-middle-income countries. In addition, the report introduces a societal poverty line based on each economy’s median income or consumption. Poverty and Shared Prosperity 2018: Piecing Together the Poverty Puzzle also recognizes that poverty is not only about income and consumption—and it introduces a multidimensional poverty measure that adds other factors, such as access to education, electricity, drinking water, and sanitation. It also explores how inequality within households could affect the global profile of the poor. All these additional pieces enrich our understanding of the poverty puzzle, bringing us closer to solving it. For more information, please visit worldbank.org/PSPPublication The African Continental Free Trade Area(Washington, DC: World Bank, 2020-07-27)The African Continental Free Trade Area (AfCFTA) agreement will create the largest free trade area in the world, measured by the number of countries participating. The pact will connect 1.3 billion people across 55 countries with a combined GDP valued at $3.4 trillion. It has the potential to lift 30 million people out of extreme poverty by 2035. But achieving its full potential will depend on putting in place significant policy reforms and trade facilitation measures. The scope of the agreement is considerable. It will reduce tariffs among member countries and cover policy areas, such as trade facilitation and services, as well as regulatory measures, such as sanitary standards and technical barriers to trade. It will complement existing subregional economic communities and trade agreements by offering a continent-wide regulatory framework and by regulating policy areas—such as investment and intellectual property rights protection—that have not been covered in most subregional agreements. The African Continental Free Trade Area: Economic and Distributional Effects quantifies the long-term implications of the agreement for growth, trade, poverty reduction, and employment. Its analysis goes beyond that in previous studies that have largely focused on tariff and nontariff barriers in goods—by including the effects of services and trade facilitation measures, as well as the distributional impacts on poverty, employment, and wages of female and male workers. It is designed to guide policy makers as they develop and implement the extensive range of reforms needed to realize the substantial rewards that the agreement offers. The analysis shows that full implementation of AfCFTA could boost income by 7 percent, or nearly $450 billion, in 2014 prices and market exchange rates. The agreement would also significantly expand African trade—particularly intraregional trade in manufacturing. In addition, it would increase employment opportunities and wages for unskilled workers and help close the wage gap between men and women.