The Case for International Coordination of Electricity Regulation: Evidence from the Measurement of Efficiency in South America

Posted: 19 Jan 2009

See all articles by Antonio Estache

Antonio Estache

Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES)

Martin Rossi

University of San Andres

Christian A. Ruzzier

University of San Andres (UMSA) - Department of Economics

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Abstract

A decade of experience has shown that monitoring the performance of public and private monopolies is the hardest part of electricity sector reform in South America-because operators control most of the information needed for effective regulation. South American electricity regulators can reduce this information asymmetry by increasing international coordination and relying on comparative measures of efficiency. To make it possible for them to do so, countries should harmonize their regulatory databases and develop methodologies for making comparisons. This paper uses data envelopment analysis and stochastic frontier analysis to estimate the efficiency of South America's main electricity distribution companies. Both approaches allow regulators to use relatively simple tests to check the robustness of their findings, strengthening their positions at regulatory hearings.

Keywords: efficiency, regulation, yardstick competition, electricity, South America

JEL Classification: L51, L94, C44

Suggested Citation

Estache, Antonio and Rossi, Martin and Ruzzier, Christian A., The Case for International Coordination of Electricity Regulation: Evidence from the Measurement of Efficiency in South America. Journal of Regulatory Economics, Vol. 25, No. 3, 2004. Available at SSRN: https://ssrn.com/abstract=1328896

Antonio Estache

Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES) ( email )

Ave. Franklin D Roosevelt, 50 - C.P. 114
Brussels, B-1050
Belgium
32 (0)2 6503838 (Phone)

Martin Rossi

University of San Andres ( email )

Vita Dumas 284
(1644) Victoria, Pcia
Buenos Aires, Buenos Aires 1644
Argentina

Christian A. Ruzzier (Contact Author)

University of San Andres (UMSA) - Department of Economics ( email )

Vito Dumas 284
B1644BID Victoria, Buenos Aires
Argentina

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