Infrastructure Bottlenecks, Private Provision, and Industrial Productivity: A Study of Indonesian and Thai Cities
36 Pages Posted: 20 Apr 2016
Date Written: May 1996
This research project followed an earlier similar project on Nigeria, applying the same methods. A sample of manufacturers was surveyed to document their responses to infrastructure deficiencies in electricity, water, transport, telecommunications, and waste disposal. They found the manufacturers undertook significant expenditures to offset deficiencies in publicly provided infrastructure services, and that changing public policy toward privately supplied infrastructure and changing the pricing of public infrastructure could yield significant savings in social costs. Thailand and Indonesia have made significant strides in following the policies for private sector participation in infrastructure provision. Nigeria, where public infrastructure monopolies still dominate, lags behind, yet stands to benefit most from such policy reform. Government policy toward the industrial organization and pricing of infrastructure sectors can significantly help a developing economy realize the benefits of private sector participation in the provision of infrastructure services.
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