Kessides, Ioannis N.2013-12-192013-12-192005-03-01World Bank Research Observerdoi:10.1093/wbro/lki003https://hdl.handle.net/10986/16404Infrastructure is crucial for generating growth, alleviating poverty, and increasing international competitiveness. For much of the twentieth century and in most countries, the network utilities that delivered infrastructure services such as electricity, natural gas, telecommunications, railroads, and water supply were vertically and horizontally integrated state monopolies. But this approach often resulted in extremely weak services, especially in developing and transition economies and especially for poor people. Common problems included low productivity, high costs, bad quality, insufficient revenue, and shortfalls in investment. Over the past two decades many countries have implemented far-reaching institutional reforms restructuring, privatizing, and establishing new approaches to regulation. This article identifies the challenges involved in this massive policy redirection within the historical, economic, and institutional context of developing and transition economies. It also reviews the outcomes of these policy changes, including their distributional consequences especially for poor households and other disadvantaged groups. Drawing on a range of international experiences and empirical studies, it recommends directions for future reforms and research to improve infrastructure performance.en-USCC BY-NC-ND 3.0 IGOACCOUNTABILITYACCOUNTINGADVANCED ECONOMIESAIRPORTAUDITINGAUTONOMYBANKING SECTORBANKRUPTCYBUDGET DEFICITSCIVIL SERVICECODES OF CONDUCTCOLLUSIONCOMPARATIVE ADVANTAGECOMPETITIVE MARKETCOMPETITIVE MARKETSCOMPETITIVENESSCONSUMERSCROSS SUBSIDIESDEBTDEREGULATIONDEVELOPING COUNTRIESDEVELOPING ECONOMIESDEVELOPMENT ECONOMICSDISTRIBUTIONAL EQUITYECONOMIC ANALYSISECONOMIC DEVELOPMENTECONOMIC EFFICIENCYECONOMIC GROWTHECONOMIC IMPLICATIONSECONOMIC REFORMECONOMIC REFORMSECONOMIC SHOCKSECONOMIC THEORYELECTRICITYEMPLOYMENTEXCESS DEMANDEXTERNALITIESFINANCIAL CONSTRAINTSFINANCIAL CRISESFINANCIAL INSTITUTIONSFINANCIAL PERFORMANCEFINANCING OF INFRASTRUCTUREFIXED ASSETSFOREIGN INVESTMENTFREE MARKETSFREIGHTFREIGHT TRAFFICGLOBAL MARKETGOVERNMENT INTERVENTIONGROSS DOMESTIC PRODUCTHORIZONTAL INTEGRATIONINCOMEINCOME DISTRIBUTIONINCOME GROUPSINCOME LEVELSINCOME TAXESINCOMESINDUSTRIAL COUNTRIESINDUSTRIAL ECONOMIESINEFFICIENCYINFLATIONINFLATION TAXINFLATION TAXESINFORMATION ASYMMETRIESINFRASTRUCTURE INVESTMENTINFRASTRUCTURE INVESTMENTSINFRASTRUCTURE PRIVATIZATIONINFRASTRUCTURE PROJECTSINFRASTRUCTURE REFORMINFRASTRUCTURE REGULATIONINSTITUTION BUILDINGINSTITUTIONAL CAPACITYJURISDICTIONSLEGISLATIONLIBERALIZATIONLOCAL GOVERNMENTLONG-DISTANCELOW-INCOME COUNTRIESMANDATESMARGINAL COSTSMARKET ECONOMYMARKET SHAREMARKET SHARESMIDDLE-INCOME COUNTRIESMINISTRY OF TRANSPORTMONOPOLIESMONOPOLYNATURAL MONOPOLIESNATURAL MONOPOLYNET ASSETSOPERATING EFFICIENCYOUTPUTPENALTIESPORT AUTHORITYPORT INFRASTRUCTUREPORTSPOST OFFICESPOTENTIAL INVESTORSPOWER OUTAGESPRICE CHANGESPRICE INCREASESPRICE RISKSPRIVATE CAPITALPRIVATE ENTITIESPRIVATE INFRASTRUCTUREPRIVATE INVESTMENTPRIVATE INVESTORSPRIVATE SECTORPRIVATE SECTOR DEVELOPMENTPRIVATIZATIONPRIVATIZATIONSPRODUCTIVITYPROFITABILITYPROPERTY RIGHTSPUBLICPUBLIC DEFICITSPUBLIC ENTERPRISESPUBLIC FINANCESPUBLIC FUNDSPUBLIC GOODPUBLIC INFRASTRUCTUREPUBLIC POLICYPUBLIC RESOURCESPUBLIC SECTORPUBLIC SERVICESPUBLIC UTILITIESPUBLIC UTILITYRAILRAIL INDUSTRYRAIL SYSTEMSRAIL TRACKRAIL USERSRAILROADRAILROADSRAILWAYRAILWAYSRATE OF RETURNREFORM PROGRAMREGULATORREGULATORSREGULATORY AGENCIESREGULATORY AGENCYREGULATORY AUTHORITYREGULATORY BODIESREGULATORY FRAMEWORKREGULATORY FRAMEWORKSREGULATORY OVERSIGHTREGULATORY REGIMESREGULATORY SYSTEMREGULATORY SYSTEMSREORGANIZATIONRETURN ON EQUITYREVENUE ADEQUACYRISK PREMIUMSROUTESAFETYSAFETY NETSSANITATIONSAVINGSSCANDALSSEWAGESOCIAL WELFARESTATE ENTERPRISESSTOCK MARKETSTOCK MARKET COLLAPSESTAXTAX REVENUETAX REVENUESTAX SYSTEMTAX SYSTEMSTAXATIONTECHNICAL ASSISTANCETECHNOLOGICAL CHANGESTELECOMMUNICATIONSTELECOMMUNICATIONS REFORMTELECOMMUNICATIONS REGULATIONTELEPHONE SERVICESTRAFFIC GROWTHTRANSACTION COSTSTRANSITION ECONOMIESTRANSITION ECONOMYTRANSPARENCYTRANSPORTTRANSPORT COSTSTRANSPORT INFRASTRUCTURETRANSPORT MODESTRANSPORT NETWORKTRANSPORTATIONTRUEVALUE ADDEDVERTICAL INTEGRATIONWATER SUPPLYWHOLESALE PRICESJournal ArticleWorld Bank10.1596/16404