Price Caps, Efficiency Payoffs, and Infrastructure Contract Renegotiation in Latin America

Twenty years ago, as the United Kingdom was getting ready to launch the privatization of its public services, Professor Littlechild developed and operationalized the concept of price caps as a regulatory regime to control for residual monopoly cond...

Full description

Bibliographic Details
Main Authors:	Estache, Antonio, Guasch, Jose-Luis, Trujillo, Lourdes
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2014
Subjects:	ACCOUNTING ACCOUNTING SYSTEMS ALLOCATIVE EFFICIENCY AUCTION AUCTIONS AUTONOMY AVERAGE COSTS CAPACITY BUILDING CAPITAL EXPENDITURES CAPITALIZATION COMPOUNDING CONTRACT RENEGOTIATIONS COST OF CAPITAL COST OF EQUITY COSTS OF CAPITAL CROSS-SUBSIDIES DEBT EMPIRICAL ANALYSIS EMPIRICAL EVIDENCE EQUILIBRIUM EQUITY INVESTMENTS GENERAL EQUILIBRIUM MODEL INCOME INCOME DISTRIBUTION INCOME LEVELS INDEXATION INDIVIDUAL RETIREMENT ACCOUNTS INFRASTRUCTURE INVESTMENT INFRASTRUCTURE PRIVATIZATION INFRASTRUCTURE REGULATION MONOPOLIES PRICE CAP PRICE CAPS PRIVATE FIRMS PRIVATE INFRASTRUCTURE PRIVATE INVESTMENT PRIVATE OPERATORS PRIVATE SECTOR INVESTMENT PRIVATE SECTOR PARTICIPATION PRIVATIZATION PRODUCTIVITY PUBLIC ENTERPRISES PUBLIC INFRASTRUCTURE PUBLIC SERVICES QUALITY OF SERVICE REGULATORY FRAMEWORK REGULATORY REGIME RETIREMENT RISK FACTORS SANITATION SECTOR SERVICE QUALITY TARIFF ADJUSTMENTS TARIFF STRUCTURE TAX REVENUE TAXATION TRANSPORT UTILITIES WATER COMPANIES WATER SECTOR WATER SERVICES PRICE CAP REGULATION INFRASTRUCTURE DEVELOPMENT OPERATIONS MANAGEMENT INFRASTRUCTURE REFORM CONTRACT NEGOTIATION CAPITAL COSTS TARIFF ESCALATION INVESTMENT REGULATION WATER SERVICES PRICE CAP REGULATION
Online Access:	http://documents.worldbank.org/curated/en/2003/08/2507713/price-caps-efficiency-payoffs-infrastructure-contract-renegotiation-latin-america http://hdl.handle.net/10986/18130

id	okr-10986-18130
recordtype	oai_dc
spelling	okr-10986-181302021-04-23T14:03:41Z Price Caps, Efficiency Payoffs, and Infrastructure Contract Renegotiation in Latin America Estache, Antonio Guasch, Jose-Luis Trujillo, Lourdes ACCOUNTING ACCOUNTING SYSTEMS ALLOCATIVE EFFICIENCY AUCTION AUCTIONS AUTONOMY AVERAGE COSTS CAPACITY BUILDING CAPITAL EXPENDITURES CAPITALIZATION COMPOUNDING CONTRACT RENEGOTIATIONS COST OF CAPITAL COST OF EQUITY COSTS OF CAPITAL CROSS-SUBSIDIES DEBT EMPIRICAL ANALYSIS EMPIRICAL EVIDENCE EQUILIBRIUM EQUITY INVESTMENTS GENERAL EQUILIBRIUM MODEL INCOME INCOME DISTRIBUTION INCOME LEVELS INDEXATION INDIVIDUAL RETIREMENT ACCOUNTS INFRASTRUCTURE INVESTMENT INFRASTRUCTURE PRIVATIZATION INFRASTRUCTURE REGULATION MONOPOLIES PRICE CAP PRICE CAPS PRIVATE FIRMS PRIVATE INFRASTRUCTURE PRIVATE INVESTMENT PRIVATE OPERATORS PRIVATE SECTOR INVESTMENT PRIVATE SECTOR PARTICIPATION PRIVATIZATION PRODUCTIVITY PUBLIC ENTERPRISES PUBLIC INFRASTRUCTURE PUBLIC SERVICES QUALITY OF SERVICE REGULATORY FRAMEWORK REGULATORY REGIME RETIREMENT RISK FACTORS SANITATION SECTOR SERVICE QUALITY TARIFF ADJUSTMENTS TARIFF STRUCTURE TAX REVENUE TAXATION TRANSPORT UTILITIES WATER COMPANIES WATER SECTOR WATER SERVICES PRICE CAP REGULATION INFRASTRUCTURE DEVELOPMENT PUBLIC SERVICES PRIVATIZATION REGULATORY FRAMEWORK OPERATIONS MANAGEMENT MONOPOLIES INFRASTRUCTURE REFORM CONTRACT NEGOTIATION CAPITAL COSTS TARIFF ESCALATION INVESTMENT REGULATION WATER SERVICES PRICE CAP REGULATION Twenty years ago, as the United Kingdom was getting ready to launch the privatization of its public services, Professor Littlechild developed and operationalized the concept of price caps as a regulatory regime to control for residual monopoly conditions in those services. Ten years later, Latin American countries, as they embarked into their own infrastructure reforms, also adopted the price cap regulatory model. Relying on a large data base on the factors driving contract renegotiation in the region and a survey of the literature on efficiency gains, the authors assess the impact of this regulatory regime in Latin America. They show that while the expected efficiency gains were amply achieved, these gains were seldom passed on to the users. Instead they were shared by the government and the firms. Moreover, the adoption of price caps implied higher costs of capital and hence, tariffs, and brought down levels of investment. 2014-05-01T18:45:18Z 2014-05-01T18:45:18Z 2003-08 http://documents.worldbank.org/curated/en/2003/08/2507713/price-caps-efficiency-payoffs-infrastructure-contract-renegotiation-latin-america http://hdl.handle.net/10986/18130 English en_US Policy Research Working Paper;No. 3129 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Latin America & Caribbean Latin America
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	ACCOUNTING ACCOUNTING SYSTEMS ALLOCATIVE EFFICIENCY AUCTION AUCTIONS AUTONOMY AVERAGE COSTS CAPACITY BUILDING CAPITAL EXPENDITURES CAPITALIZATION COMPOUNDING CONTRACT RENEGOTIATIONS COST OF CAPITAL COST OF EQUITY COSTS OF CAPITAL CROSS-SUBSIDIES DEBT EMPIRICAL ANALYSIS EMPIRICAL EVIDENCE EQUILIBRIUM EQUITY INVESTMENTS GENERAL EQUILIBRIUM MODEL INCOME INCOME DISTRIBUTION INCOME LEVELS INDEXATION INDIVIDUAL RETIREMENT ACCOUNTS INFRASTRUCTURE INVESTMENT INFRASTRUCTURE PRIVATIZATION INFRASTRUCTURE REGULATION MONOPOLIES PRICE CAP PRICE CAPS PRIVATE FIRMS PRIVATE INFRASTRUCTURE PRIVATE INVESTMENT PRIVATE OPERATORS PRIVATE SECTOR INVESTMENT PRIVATE SECTOR PARTICIPATION PRIVATIZATION PRODUCTIVITY PUBLIC ENTERPRISES PUBLIC INFRASTRUCTURE PUBLIC SERVICES QUALITY OF SERVICE REGULATORY FRAMEWORK REGULATORY REGIME RETIREMENT RISK FACTORS SANITATION SECTOR SERVICE QUALITY TARIFF ADJUSTMENTS TARIFF STRUCTURE TAX REVENUE TAXATION TRANSPORT UTILITIES WATER COMPANIES WATER SECTOR WATER SERVICES PRICE CAP REGULATION INFRASTRUCTURE DEVELOPMENT PUBLIC SERVICES PRIVATIZATION REGULATORY FRAMEWORK OPERATIONS MANAGEMENT MONOPOLIES INFRASTRUCTURE REFORM CONTRACT NEGOTIATION CAPITAL COSTS TARIFF ESCALATION INVESTMENT REGULATION WATER SERVICES PRICE CAP REGULATION
spellingShingle	ACCOUNTING ACCOUNTING SYSTEMS ALLOCATIVE EFFICIENCY AUCTION AUCTIONS AUTONOMY AVERAGE COSTS CAPACITY BUILDING CAPITAL EXPENDITURES CAPITALIZATION COMPOUNDING CONTRACT RENEGOTIATIONS COST OF CAPITAL COST OF EQUITY COSTS OF CAPITAL CROSS-SUBSIDIES DEBT EMPIRICAL ANALYSIS EMPIRICAL EVIDENCE EQUILIBRIUM EQUITY INVESTMENTS GENERAL EQUILIBRIUM MODEL INCOME INCOME DISTRIBUTION INCOME LEVELS INDEXATION INDIVIDUAL RETIREMENT ACCOUNTS INFRASTRUCTURE INVESTMENT INFRASTRUCTURE PRIVATIZATION INFRASTRUCTURE REGULATION MONOPOLIES PRICE CAP PRICE CAPS PRIVATE FIRMS PRIVATE INFRASTRUCTURE PRIVATE INVESTMENT PRIVATE OPERATORS PRIVATE SECTOR INVESTMENT PRIVATE SECTOR PARTICIPATION PRIVATIZATION PRODUCTIVITY PUBLIC ENTERPRISES PUBLIC INFRASTRUCTURE PUBLIC SERVICES QUALITY OF SERVICE REGULATORY FRAMEWORK REGULATORY REGIME RETIREMENT RISK FACTORS SANITATION SECTOR SERVICE QUALITY TARIFF ADJUSTMENTS TARIFF STRUCTURE TAX REVENUE TAXATION TRANSPORT UTILITIES WATER COMPANIES WATER SECTOR WATER SERVICES PRICE CAP REGULATION INFRASTRUCTURE DEVELOPMENT PUBLIC SERVICES PRIVATIZATION REGULATORY FRAMEWORK OPERATIONS MANAGEMENT MONOPOLIES INFRASTRUCTURE REFORM CONTRACT NEGOTIATION CAPITAL COSTS TARIFF ESCALATION INVESTMENT REGULATION WATER SERVICES PRICE CAP REGULATION Estache, Antonio Guasch, Jose-Luis Trujillo, Lourdes Price Caps, Efficiency Payoffs, and Infrastructure Contract Renegotiation in Latin America
geographic_facet	Latin America & Caribbean Latin America
relation	Policy Research Working Paper;No. 3129
description	Twenty years ago, as the United Kingdom was getting ready to launch the privatization of its public services, Professor Littlechild developed and operationalized the concept of price caps as a regulatory regime to control for residual monopoly conditions in those services. Ten years later, Latin American countries, as they embarked into their own infrastructure reforms, also adopted the price cap regulatory model. Relying on a large data base on the factors driving contract renegotiation in the region and a survey of the literature on efficiency gains, the authors assess the impact of this regulatory regime in Latin America. They show that while the expected efficiency gains were amply achieved, these gains were seldom passed on to the users. Instead they were shared by the government and the firms. Moreover, the adoption of price caps implied higher costs of capital and hence, tariffs, and brought down levels of investment.
format	Publications & Research :: Policy Research Working Paper
author	Estache, Antonio Guasch, Jose-Luis Trujillo, Lourdes
author_facet	Estache, Antonio Guasch, Jose-Luis Trujillo, Lourdes
author_sort	Estache, Antonio
title	Price Caps, Efficiency Payoffs, and Infrastructure Contract Renegotiation in Latin America
title_short	Price Caps, Efficiency Payoffs, and Infrastructure Contract Renegotiation in Latin America
title_full	Price Caps, Efficiency Payoffs, and Infrastructure Contract Renegotiation in Latin America
title_fullStr	Price Caps, Efficiency Payoffs, and Infrastructure Contract Renegotiation in Latin America
title_full_unstemmed	Price Caps, Efficiency Payoffs, and Infrastructure Contract Renegotiation in Latin America
title_sort	price caps, efficiency payoffs, and infrastructure contract renegotiation in latin america
publisher	World Bank, Washington, DC
publishDate	2014
url	http://documents.worldbank.org/curated/en/2003/08/2507713/price-caps-efficiency-payoffs-infrastructure-contract-renegotiation-latin-america http://hdl.handle.net/10986/18130
_version_	1764438935934599168

Price Caps, Efficiency Payoffs, and Infrastructure Contract Renegotiation in Latin America

Similar Items