Uncovering the Drivers of Utility Performance: Lessons from Latin America and the Caribbean on the Role of the Private Sector, Regulation, and ... Sectors (Directions in Development)

For the past three decades, infrastructure economics has been preoccupied with the business of answering the question, 'How?' in various contexts and settings. When public ownership of utilities appeared to be the sole cause of massive debts and poor services throughout Latin America and the Caribbean, economists were brought in to figure out how to privatize state-owned enterprises. When the capture of utility operators became a concern, the question evolved into, 'How should public services be regulated?' And when, in recent years, the public s patience with private operators began to wear thin, the questions became, 'How do we rebalance risks?' 'How do we best design public-private partnerships?' and 'How do we take account of the rise of populism, of volatility in financial markets, of the flight of capital to safety?'

The primary purpose of Uncovering the Drivers of Utility Performance is to step back from the carpentry of 'How?' and answer the underlying question, 'Why?' Why do some utilities perform well while others perform poorly?

This book provides insights into infrastructure sector performance by focusing on the links connecting key indicators for private and public utilities, as well as on changes in ownership, regulatory agency governance, and corporate governance, among other dimensions. By linking inputs and outputs over the past 15 years, the analysis is able to uncover key determinants that have impacted performance in infrastructure sectors in Latin America and the Caribbean, and help one understand why the effects of such variables result in significant changes in the performance of infrastructure service provision.

The book focuses on the distribution segment of basic infrastructure services: electricity, water and sewerage, and fixed telecommunications. It uses previously unavailable data on the performance of utility companies; in addition to private service providers, data were collected through surveys sent to regulatory agencies and state-owned enterprises throughout the region.

The entire analysis undertaken for Uncovering the Drivers is based on a dataset specifically constructed for this purpose. For most of the analysis, the data collected are original and are used here for the first time. The wealth of information pulled together through this exercise lends itself to further far-reaching analysis. By making this information available to a broader audience, the authors hope that such benchmarking efforts provide a regional- and utility-level frame of reference for sector performance, good or poor, in the region.