ERIC Number: ED467712
Record Type: Non-Journal
Publication Date: 2002-Jul
Reference Count: N/A
Universal(ly Bad) Service: Providing Infrastructure Services to Rural and Poor Urban Consumers. Policy Research Working Paper.
Clarke, George R. G.; Wallsten, Scott J.
Utility services (telecommunications, power, water, and gas) throughout the world were traditionally provided by large, usually state-owned, monopolies. However, encouraged by technological change, regulatory innovation, and pressure from international organizations, many developing countries are privatizing state-owned companies and introducing competition. Some observers worry that even if reforms improve efficiency, they might compromise an important public policy goal--ensuring universal access for low-income and rural households. This paper first reviews the motivation for universal service, methods used to try to achieve it under monopoly service provision, how reforms might affect these approaches, and the theoretical and empirical evidence regarding the impact reform on these consumers. Next, using household data from around the world, the paper investigates empirically the historical performance of public monopolies in meeting universal service obligations and the impacts of reform. The results demonstrate the massive failure of state monopolies to provide service to poor and rural households everywhere except Eastern Europe. Moreover, while the data are limited, the evidence suggests that reforms have not harmed poor and rural consumers, and in many cases have improved their access to utility services. Nevertheless, because competition undermines traditional methods of funding universal service (cross-subsidies), the paper also reviews mechanisms that could finance this objective without compromising the benefits of reforms. (Contains 63 references.) (Author/TD)
Descriptors: Competition, Developing Nations, Educational Attainment, Financial Support, Foreign Countries, Low Income Groups, Privatization, Public Policy, Rural Areas, Utilities
For full text: http://econ.worldbank.org/files/16649_wps2868.pdf.
Publication Type: Opinion Papers; Reports - Descriptive
Education Level: N/A
Authoring Institution: World Bank, Washington, DC.