Infrastructure Restructuring and Regulation : Building a Base for Sustainable Growth
The link between economic growth, and better provision of infrastructure services may be unproven, but it is clear that reforms to make infrastructure services more competitive (where possible), and to provide strong, and independent economic regul...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2000/08/693338/infrastructure-restructuring-regulation-building-base-sustainable-growth http://hdl.handle.net/10986/19800 |
| Summary: | The link between economic growth, and
better provision of infrastructure services may be unproven,
but it is clear that reforms to make infrastructure services
more competitive (where possible), and to provide strong,
and independent economic regulation of natural monopolies,
do create an environment more conducive to: 1) Private
sector participation in infrastructure investments. 2)
companies trying to cut costs, and pass the savings on to
consumers. 3) Better provision of services (through faster
rollout of infrastructure, for example, and through
innovative solutions for delivering services to customers
who are not connected to an existing network). It is
important that policymakers make the right decisions when
deciding how to restructure infrastructure. First, they
should review the evidence on the impact various types of
reform have had. The authors provide an overview of the
evidence from - and lessons learned in - Latin America, one
of the first regions to undertake wholesale reform of its
infrastructure service provides. Among their conclusions: a)
the reform of utility, and infrastructure industries is
vital to economic growth. b) Apparently well-founded, but
wrong decisions can damage growth prospects. C) Reform
should combine changes in industry structure, ownership, and
(through effective regulation) behavior. To minimize the
risk of misconduct by infrastructure companies, the
government should introduce: i) As much competition as
possible (after evaluating all tradeoffs). ii) Rules to
limit (or eliminate) vertical, and horizontal ownership,
which makes it difficult to regulate company behavior. iii)
Rules to ensure that regulators get all the information they
need, and that it is timely, consistent, and accurate. |
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