Publication: Do Regulation and Institutional Design Matter for Infrastructure Sector Performance?
Date
2007-10
ISSN
Published
2007-10
Author(s)
Abstract
This paper evaluates the impact of
economic regulation on infrastructure sector outcomes. It
tests the impact of regulation from three different angles:
aligning costs with tariffs and firm profitability; reducing
opportunistic renegotiation; and measuring the effects on
productivity, quality of service, coverage, and prices. The
analysis uses an extensive data set of about 1,000
infrastructure concessions granted in Latin America from the
late 1980s to the early 2000s. The analysis finds that as
the theory indicates, regulation matters. The empirical work
here reported shows that in three relevant economic
aspects-aligning costs and tariffs; dissuading
renegotiations; and improving productivity, quality of
service, coverage, and tariffs-the structure, institutions,
and procedures of regulation matter. Thus, significant
efforts should continue to be made to improve the structure,
quality, and institutionality of regulation. Regulation
matters for protecting both consumers and investors, for
aligning closely financial returns and the costs of capital,
and for capturing higher levels of benefits from the
provision of infrastructure services by the private sector.
Citation
“Andres, Luis; Guasch, Jose Luis; Straub, Stephane. 2007. Do Regulation and Institutional Design Matter for Infrastructure Sector Performance?. Policy Research Working Paper; No. 4378. © World Bank, Washington, DC. http://openknowledge.worldbank.org/entities/publication/f3e70585-c753-58e7-80d1-9951e53c2bb0 License: CC BY 3.0 IGO.”
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