Infrastructure Performance and Reform in Developing and Transition Economies: Evidence from a Survey of Productivity Measures

28 Pages Posted: 9 Feb 2005

See all articles by Antonio Estache

Antonio Estache

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

Sergio Perelman

University of Liege - Department of Economics

Lourdes Trujillo

Departamento de Analisis Economico Aplicado; University College of London (UCL)

Date Written: February 2005

Abstract

Estache, Perelman, and Trujillo review about 80 studies on electricity and gas, water and sanitation, and rail and ports (with a footnote on telecommunications) in developing countries. The main policy lesson is that there is a difference in the relevance of ownership for efficiency between utilities and transport in developing countries. In transport, private operators have tended to perform better than public operators. For utilities, ownership often does not matter as much as sometimes argued. Most cross-country studies find no statistically significant difference in efficiency scores between public and private providers. As for the country-specific studies, some do find differences in performance over time but these differences tend to matter much less than a large number of other variables. Across sectors, private operators functioning in a competitive environment or regulated under price caps or hybrid regulatory regimes tend to catch up best practice faster than public operators. There is a very strong case to push regulators in developing and transition economies toward a more systematic reliance on yardstick competition in a sector in which residual monopoly powers tend to be common.

This paper - a product of the Office of the Vice President, Infrastructure Network - is part of a larger effort in the network to document the state of the sector.

Suggested Citation

Estache, Antonio and Perelman, Sergio and Trujillo-Castellano, Lourdes, Infrastructure Performance and Reform in Developing and Transition Economies: Evidence from a Survey of Productivity Measures (February 2005). World Bank Policy Research Working Paper No. 3514. Available at SSRN: https://ssrn.com/abstract=664528

Antonio Estache (Contact Author)

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)

Sergio Perelman

University of Liege - Department of Economics ( email )

7 Boulevard du Rectorat
Batiment B31
4000 Liege
Belgium
+32 4 156 3098 (Phone)
+32 4 156 2958 (Fax)

Lourdes Trujillo-Castellano

Departamento de Analisis Economico Aplicado ( email )

Universidad de Las Palmas de Gran Canaria
Campus de Tafira
Las Palmas de Gran Canaria, Las Palmas 35017
Spain

University College of London (UCL)

Chadwick Building
Gower Street
London, London WC1E 6
United Kingdom

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