Publication:
Subsidies in Chilean Public Utilities

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dc.contributor.authorSerra, Pablo
dc.date.accessioned2015-01-22T21:10:09Z
dc.date.available2015-01-22T21:10:09Z
dc.date.issued2000-09
dc.description.abstractThe author analyzes subsidies in Chile's public utilities. Over the last decade, especially, significant efforts have been made to extend public services to rural populations. An explicit consumption subsidy for potable water (targeted to the poorest twenty percent of the population) currently benefits seventeen percent of the population. Cross-subsidies have been virtually eliminated in Chile, and existing subsidies are funded from the national budget. The elimination of cross-subsidies has facilitated competition in some services. Prices have fallen substantially in services that new operators have entered, showing that regulation is a poor substitute for competition. The Chilean experience shows that it is possible to design direct subsidies (such as the one for drinking water) at relatively low cost to the state. Moreover, putting rural infrastructure projects out to public tender whenever possible, has allowed substantial reductions in government spending. Chile's experience also shows that it is possible to use subsidies that do not distort people's behavior - by making sure that they perceive the marginal cost of providing the service. In rural zones where there is no infrastructure, investment needs to be subsidized. Users do not pay the long-run marginal cost, but it is important that the rate charged, at least cover the short-term marginal cost. In other words, rural utility charges are required to cover the system's operating costs. For those who argue that the poor would be better off with cash transfers (choosing their own consumption baskets), the author outlines the arguments for subsidizing utilities, beyond the moral value of giving the poor access to public services, considered basic for existence.en
dc.identifier.doi10.1596/1813-9450-2445
dc.identifier.urihttps://hdl.handle.net/10986/21335
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No. 2445
dc.rightsCC BY 3.0 IGO
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo
dc.subjectadministrative costs
dc.subjectbad debts
dc.subjectcash transfers
dc.subjectcentral government
dc.subjectcitizen participation
dc.subjectconcession areas
dc.subjectconsumer surplus
dc.subjectconsumption charge
dc.subjectcost of water
dc.subjectcross subsidies
dc.subjectcross-subsidies
dc.subjectcurrent prices
dc.subjectdebt
dc.subjectdrinking water
dc.subjecteconomics
dc.subjectelectricity
dc.subjectelectricity services
dc.subjectenergy consumption
dc.subjectexpenditures
dc.subjectgovernment spending
dc.subjecthouseholds
dc.subjecthousing
dc.subjectincome
dc.subjectlegislation
dc.subjectlocal authorities
dc.subjectmaintenance costs
dc.subjectmarginal cost
dc.subjectmedical care
dc.subjectmunicipalities
dc.subjectnational budget
dc.subjectoperating costs
dc.subjectpolicy research
dc.subjectpositive externalities
dc.subjectpotable water
dc.subjectpresent value
dc.subjectprice elasticity of demand
dc.subjectprivate sector
dc.subjectprivatization
dc.subjectproduction costs
dc.subjectprofitability
dc.subjectpublic health
dc.subjectpublic health services
dc.subjectpublic services
dc.subjectpublic utilities
dc.subjectpublic water
dc.subjectpublic works
dc.subjectregulatory framework
dc.subjectresidential consumers
dc.subjectreturn on equity
dc.subjectrural communities
dc.subjectrural drinking water
dc.subjectsanitation services
dc.subjectscale economies
dc.subjectservice provider
dc.subjectsewerage services
dc.subjectsocial costs
dc.subjectsocial expenditure
dc.subjectsocial welfare
dc.subjectsurcharges
dc.subjecttechnical assistance
dc.subjecttelecommunications
dc.subjecttransaction costs
dc.subjecttreasury
dc.subjecturban areas
dc.subjectwater companies
dc.subjectwater company
dc.subjectwater consumption
dc.subjectwater coverage
dc.subjectwater meter
dc.subjectwater rates
dc.subjectwater services
dc.subjectwater systems
dc.subjectwillingness to pay
dc.subjectsubsidies
dc.subjectpublic utility finance
dc.subjectrural population
dc.subjectconsumption patterns
dc.subjectpotable water
dc.subjectcross-subsidies
dc.subjectcompetitiveness
dc.subjectprice decontrols
dc.subjectregulatory framework
dc.subjectrural infrastructure
dc.subjectmarginal costs
dc.titleSubsidies in Chilean Public Utilitiesen
dspace.entity.typePublication
okr.crossref.titleSubsidies in Chilean Public Utilities
okr.date.disclosure2000-09-30
okr.date.doiregistration2025-04-10T09:47:18.137857Z
okr.doctypePublications & Research
okr.doctypePublications & Research::Policy Research Working Paper
okr.globalpracticeHealth, Nutrition, and Population
okr.globalpracticeWater
okr.globalpracticeMacroeconomics and Fiscal Management
okr.guid850051468768861504
okr.identifier.doi10.1596/1813-9450-2445
okr.identifier.reportWPS2445
okr.language.supporteden
okr.region.administrativeLatin America & Caribbean
okr.region.countryChile
okr.sectorPublic Administration, Law, and Justice
okr.topicEnvironment::Environmental Economics & Policies
okr.topicFinance and Financial Sector Development::Banks & Banking Reform
okr.topicHealth, Nutrition and Population
okr.topicHealth, Nutrition and Population::Health Economics & Finance
okr.topicMacroeconomics and Economic Growth::Economic Theory & Research
okr.topicPublic Sector Development
okr.topicPublic Sector Development::Decentralization
okr.topicWater Supply and Sanitation::Town Water Supply and Sanitation
okr.unitOff of Sr VP Dev Econ/Chief Econ (DECVP)
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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