Publication: Reshaping Power Markets-Lessons from Chile and Argentina
Loading...
Published
1996-06
ISSN
Date
2012-08-13
Author(s)
Editor(s)
Abstract
Power sector reforms in Chile and Argentina are now roughly fourteen and four years old. In both countries, restructuring and deregulation have increased efficiency, led to active entry by new generators, improved the quality of supply, and reduced prices in real terms. The authors' review of experience in both systems confirms that policymakers must apply effective measures to introduce and preserve competition. In Chile, a major concern is the predominance of one generator in one of the two systems.
Link to Data Set
Citation
“Lalor, R. Peter; García, Hernán. 1996. Reshaping Power Markets-Lessons from Chile and Argentina. Viewpoint: Public Policy for the Private Sector; Note No. 85. © World Bank. http://hdl.handle.net/10986/11617 License: CC BY 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Publication Small Business Tax Regimes(World Bank, Washington, DC, 2016-02)Simplified tax regimes for micro and small enterprises in developing countries are intended to facilitate voluntary tax compliance. However, survey evidence suggests that small business taxation based on simplified bookkeeping or turnover is sometimes perceived as too complex for microenterprises in countries with high illiteracy levels. Very simple fixed tax regimes not requiring any books or records tend to be overly popular but prone to abuse. System reforms will require more precise tailoring of the simplified regimes to their target beneficiaries, coupled with strong compliance management to detect and deter abuse. The overall objective of simplified taxation for micro and small enterprises (MSEs) in developing countries is generally to facilitate voluntary tax compliance and remove obstacles in moving toward business formalization and growth.Publication Investment Climate in Africa(World Bank, Washington, DC, 2015-07-01)The World Bank Group has been working on investment climate reform in Sub-Saharan Africa for nearly a decade, a period characterized by dramatic economic growth on the continent. Establishing links between such reform interventions and economic growth, however, is a complex problem. Although this note finds some connection between investment climate reform and economic growth, establishing more concrete evidence of causation will require greater focus at the country level, as well as on small and medium enterprises. This is where investment climate interventions generate change.Publication Export Competitiveness(World Bank, Washington, DC, 2015-06)This review of the empirical literature shows that industries with more intense domestic competition will export more. Competition law enforcement can be traced to export performance and is complementary to trade reforms. Pro-competition market regulation that reduces restrictions and promotes competition, where it is viable, is an important determinant for trade. The elimination of barriers to entry and rivalry, and a level playing field in upstream sectors contributes to export competitiveness in downstream manufacturing sectors. In some sectors, effective competition policy can directly lower trade costs.Publication Competition and Poverty(World Bank, Washington, DC, 2016-04)A literature review shows competition policy reforms can deliver benefits for the poorest households and improve income distribution. A lack of competition in food markets hurts the poorest households the most. Competition in input markets and between buyers helps farmers and small businesses. And more competitive markets bolster job growth over the longer term. More research is needed, however, to better understand the impact of competition reforms and antitrust enforcement on poverty and shared prosperity.Publication Contract Farming(World Bank, Washington, DC, 2014-10)Contract farming involves production by farmers under agreement with buyers for their outputs. This arrangement can help integrate small-scale farmers into modern agricultural value chains, providing them with inputs, technical assistance, and assured markets. Critics contend that contract partners may subject farmers to abuses. The literature shows that in fact contract farming can raise farm income, but mainly for high-value crops. It also indicates that in many cases firms are willing to work with small farms. This note confirms that conflicts are common between buyers and farmers, and that alternative dispute resolution methods may help resolve them.
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication The Potential of Regional Power Sector Integration : PJM Interconnect, Developed Country Case Study(World Bank, Washington, DC, 2009-08)Developing countries are increasingly pursuing and benefitting from regional power system integration (RPSI) as an important strategy to help provide reliable, affordable electricity to their economies and citizens. Increased electricity cooperation and trade between countries can enhance energy security, bring economies-of-scale in investments, facilitate financing, enable greater renewable energy penetration, and allow synergistic sharing of complementary resources. This briefing note draws from the experiences of RPSI schemes around the world to present a set of findings to help address these challenges. It is based on case studies of 12 RPSI projects and how they are dealing with key aspects of RPSI, such as: (i) finding the right level of integration; (ii) optimizing investment on a regional basis; (iii) appropriate regional institutions (iv) technical and regulatory harmonization; (v) power sector reform and integration (vi) the role of donor agencies (vii) reducing emissions through RPSI; and (viii) RPSI and renewable energy.Publication The Potential of Regional Power Sector Integration : Argentina-Brazil Transmission and Trading Case Study(World Bank, Washington, DC, 2010-01)Developing countries are increasingly pursuing and benefitting from regional power system integration (RPSI) as an important strategy to help provide reliable, affordable electricity to their economies and citizens. Increased electricity cooperation and trade between countries can enhance energy security, bring economies-of-scale in investments, facilitate financing, enable greater renewable energy penetration, and allow synergistic sharing of complementary resources. This briefing note draws from the experiences of RPSI schemes around the world to present a set of findings to help address these challenges. It is based on case studies of 12 RPSI projects and how they are dealing with key aspects of RPSI, such as: (i) finding the right level of integration; (ii) optimizing investment on a regional basis; (iii) appropriate regional institutions (iv) technical and regulatory harmonization; (v) power sector reform and integration (vi) the role of donor agencies (vii) reducing emissions through RPSI; and (viii) RPSI and renewable energy.Publication International Experience with Open Access to Power Grids : Synthesis Report(Washington, DC, 2013-11-01)Reliable and affordable supply of electricity is a key driver of economic growth. In recent decades, many developing and emerging economies have embarked on efforts to enhance the efficiency of their electricity markets. The quest for efficiency often involves structural reforms such as unbundling and other measures designed to support greater competition in the power sector. Open Access (OA) to Transmission and Distribution (T&D) grids by market participants is an essential element in this reform process. The study has proceeded on two tracks: one based on empirical findings from specific country cases, and a generic one synthesizing the emerging global issues in OA. Reports for the country studies have been prepared for Brazil, Peru, Turkey, India, and the Philippines. In addition, a global review of the experience in a broader group of countries, both developed and developing, has been undertaken. Overall, the study has taken a broad approach to defining OA - going well beyond the minimalist notion of simply guaranteeing legal access to the grid for generators and wholesale buyers.Publication Regional Power Integration : Structural and Regulatory Challenges(World Bank, 2011-01-01)The Central America Regional Electricity Market (MER) trades electricity and transmission capacity among six Central American countries: Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama. The market differs from other electricity markets worldwide because it has its own regulatory body and system operator. Economic integration of the Central American countries has followed a natural evolution. The continuous increase in the demand for goods and services has been accompanied by political and institutional arrangements leading to the materialization of commercial and trade agreements aimed at benefiting the nationals of all the integrated nations at the lowest possible cost. This is particularly true in the electricity sector, which provides a key development service for the achievement of sustainable growth. In fact, electricity integration through cross-border power trade has been discussed by the Central American countries since the late 1970s. This report analyzes the progress of the Central American integrated electricity market, including the institutional, legal, regulatory and contractual framework of the MER and of each of the six national markets. It then identifies the main barriers that will have to be addressed in order to ensure a successful evolution to full operation of the Central American Electrical Interconnection System (SIEPAC) interconnection system and achieve true market integration.Publication Mitigating Vulnerability to High and Volatile Oil Prices : Power Sector Experience in Latin America and the Caribbean(Washington, DC: World Bank, 2012)Countries heavily dependent on imported oil to power a significant portion of their electricity generation are especially vulnerable to high and volatile oil prices. In net oil-importing countries worldwide, high and volatile oil prices ripple through the power sector to numerous segments of the economy. As prices move up and down, so does the cost of electricity production, which has far-reaching effects on the economy, fiscal and trade balances, businesses, and household living standards. High and volatile oil prices affect economies at both a macro and micro level. The major direct effects at the macro level are a deteriorating trade balance, through a higher import bill, reflecting a worsening in terms of trade; and a weakening fiscal balance due to greater government transfers and subsidies to insulate movements in international energy markets. At the micro level, investment uncertainty results from the higher risk of engaging in new projects and associated development and sunk costs, which, in turn, affects policy decisions and economic growth. This study responds to the needs of policy makers and energy planners in oil-importing countries to better manage exposure to oil price risk. The study's objective is threefold. First, it analyzes the economic effects of higher and volatile prices on oil-importing countries, with emphasis on the power sector, using examples from Latin America and the Caribbean (LAC). Second, it proposes a menu of complementary options that can be applied over multiple time frames. Several structural measures are designed to reduce oil generation and consumption, while a range of financial instruments are suggested for managing price risk in the short term. Finally, it attempts to quantify some of the macroeconomic and microeconomic benefits that could accrue from implementing such options.
Users also downloaded
Showing related downloaded files
Publication Regional Poverty and Inequality Update: Latin America and the Caribbean, October 2025(Washington, DC: World Bank, 2025-10-23)This brief summarizes recent facts related to poverty and inequality in Latin America and the Caribbean (LAC) using the latest wave of harmonized household surveys from the Socio-Economic Database for LAC (SEDLAC). This brief was produced by the Poverty Global Practice in the LAC Region of the World Bank.Publication Thailand Monthly Economic Monitor, October 2025(Washington, DC: World Bank, 2025-10-22)Fiscal conditions remained stable, with a modest widening of the deficit to 3.1 percent of GDP. New stimulus measures are expected to support short-term demand without breaching the public debt ceiling. Inflation stayed negative, reflecting lower energy and food prices amid subdued domestic demand. The central bank kept the policy rate unchanged, citing limited policy space. Thailand’s growth momentum has slowed further as manufacturing activity and services weakened as projected. Tourism remained subdued, largely due to fewer Chinese visitors. Goods exports also slowed as earlier front-loaded orders faded, particularly in agriculture and industrial goods. The Thai baht depreciated in early October as the US dollar appreciated and the current account turned negative.Publication Ukraine Country Environmental Analysis(World Bank, Washington, DC, 2016-01)The objective of the Country Environmental Analysis (CEA) is to assess the adequacy and performance of the policy, legal, and institutional framework for environmental management in Ukraine, in light of the decentralization process of environmental governance and wider reform objectives, and to provide recommendations to government to address the key gaps identified. Ukraine is the second largest country in Europe and has a population of 43 million, the majority of whom live in urban areas. It is a lower middle income country, with the services, industry and agriculture sectors being main contributors to the country’s Gross Domestic Product (GDP). Ukraine faces a number of environmental challenges, as identified in its National Environmental Strategy 2020 (NES). Key among these are: air pollution; quality of water resources and land degradation; solid waste management; biodiversity loss; human health issues associated with environmental risk factors; in addition to climate change. The scope of Ukrainian environmental legislation is quite broad and comprehensive (more than 300 legal acts) and covers most areas of environmental protection and natural resources management. However, the environmental legislation faces a number of weaknesses:The environmental legislation is largely declaratory in nature and does not have all the essential enforcement mechanisms for the implementation of legal acts and international agreements; Many of the acts are not coordinated with each other; and Legislation undergoes limited analysis of its impact—for example, no in-depth analysis such as Regulatory Impact Analysis is conducted for proposed pieces of legislation.Publication Digital Africa(Washington, DC: World Bank, 2023-03-13)All African countries need better and more jobs for their growing populations. "Digital Africa: Technological Transformation for Jobs" shows that broader use of productivity-enhancing, digital technologies by enterprises and households is imperative to generate such jobs, including for lower-skilled people. At the same time, it can support not only countries’ short-term objective of postpandemic economic recovery but also their vision of economic transformation with more inclusive growth. These outcomes are not automatic, however. Mobile internet availability has increased throughout the continent in recent years, but Africa’s uptake gap is the highest in the world. Areas with at least 3G mobile internet service now cover 84 percent of Africa’s population, but only 22 percent uses such services. And the average African business lags in the use of smartphones and computers as well as more sophisticated digital technologies that catalyze further productivity gains. Two issues explain the usage gap: affordability of these new technologies and willingness to use them. For the 40 percent of Africans below the extreme poverty line, mobile data plans alone would cost one-third of their incomes—in addition to the price of access devices, apps, and electricity. Data plans for small- and medium-size businesses are also more expensive than in other regions. Moreover, shortcomings in the quality of internet services—and in the supply of attractive, skills-appropriate apps that promote entrepreneurship and raise earnings—dampen people’s willingness to use them. For those countries already using these technologies, the development payoffs are significant. New empirical studies for this report add to the rapidly growing evidence that mobile internet availability directly raises enterprise productivity, increases jobs, and reduces poverty throughout Africa. To realize these and other benefits more widely, Africa’s countries must implement complementary and mutually reinforcing policies to strengthen both consumers’ ability to pay and willingness to use digital technologies. These interventions must prioritize productive use to generate large numbers of inclusive jobs in a region poised to benefit from a massive, youthful workforce—one projected to become the world’s largest by the end of this century.Publication Do Pro-Poor Policies Increase Water Coverage? An Analysis of Service Delivery in Kampala's Informal Settlements(Washington, DC, 2014)Uganda is one of the poorest countries in Africa with a gross national income (GNI) per capita in 2010 of United States (U.S.) $500 compared with the Sub-Saharan regional average of $1,170. Uganda's population growth of over 3 percent per year, one of the highest in the world, puts a considerable strain on public sector service delivery, not just for water and sanitation but also in other areas such as health, education, and transport. The aim of this study is to assess the impact of the pro-poor policies introduced by the National Water and Sewerage Corporation (NWSC) between 2004 and 2010, by analyzing the effectiveness, efficiency, and equity of these policies and strategies implemented by the Government of Uganda (GoU) and NWSC to increase coverage of urban water supply services in poor settlements. The study focuses exclusively on the area of Kampala city, the capital of Uganda, as this constitutes the largest service area of the NWSC - with approximately 60 percent of its connections and 64 percent of its revenues. The assessment of the impact of the pro-poor policies on the poor in Kampala is based on an analysis of the effectiveness, the efficiency, and the equity of these policies since 2004. The report is divided into the following six chapters: chapter one gives the introduction of the report and presents the objectives and methods used. Chapter two presents an overview of the water sector in Kampala, including the legal, institutional, and regulatory framework, a definition of poverty in Kampala and what this means for poor households. Chapter three describes the urban water sector policy and the strategy developed by the NWSC to expand services and improve financial performance. Chapter four analyzes in detail the impact of NWSC policies and water supply delivery mechanisms on services to poor households in Kampala. Chapter five contains the conclusions of the study. Chapter six contains recommendations for further analysis which can be undertaken by the NWSC, GoU, and or the World Bank.