Universal Service Obligations in Developing Countries

Universal Service Obligations in Developing Countries

This paper develops a model to analyze the impacts of asymmetric information on optimal universal, service policy in the public utilities of developing countries. Optimal universal service policy is implemented using two regulatory instruments: pri...

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Bibliographic Details
Main Authors: Estache, Antonio, Laffont, Jean-Jacques, Xinzhu Zhang
Format: Policy Research Working Paper
Language:English
en_US
Published: World Bank, Washington, D.C. 2013
Subjects:
ASYMMETRIC INFORMATION
BENCHMARK
COLLUSION
CONSUMER SURPLUS
CONSUMERS
COVERAGE
DEVELOPMENT STRATEGIES
DEVELOPMENT STRATEGY
ELASTICITY
ICT
INDUSTRIAL ECONOMIES
INFORMATION ECONOMICS
INFORMATION GAP
INFORMATION TECHNOLOGY
LIABILITY
MARGINAL COST
MARGINAL COSTS
NASH EQUILIBRIUM
NETWORKS
OPTIMIZATION
POLICY INSTRUMENTS
POLICY MAKERS
POLITICAL ECONOMY
PRICE DISCRIMINATION
PRIVATE INFORMATION
PROGRAMS
REGULATORY CAPTURE
REGULATORY POLICY
RISK NEUTRAL
SAVINGS
SERVICE DELIVERY
SOCIAL MARGINAL COST
TELECOMMUNICATIONS
TELECOMMUNICATIONS POLICY
TELECOMMUNICATIONS SERVICES
TELEPHONE SERVICES
UNIVERSAL SERVICE
UTILITY FUNCTION
Online Access:http://documents.worldbank.org/curated/en/2004/10/5185071/universal-service-obligations-developing-countries
http://hdl.handle.net/10986/14227
Description
Summary:This paper develops a model to analyze the impacts of asymmetric information on optimal universal, service policy in the public utilities of developing countries. Optimal universal service policy is implemented using two regulatory instruments: pricing and network investment. Under discriminatory pricing asymmetric information leads to a higher price, and smaller network in the rural area, than under full information. Under uniform pricing, the price is also lower but the network is even smaller. In addition, under both pricing regimes, not only the firm, but also taxpayers have incentives to collude with the regulator.

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