Universal service obligations in developing countries

By: Contributor(s): Material type: TextTextSeries: Policy Research Working Paper, no. 3421Publication details: Washington, D. C. World Bank 2004Description: 31 pSubject(s): DDC classification:
  • 338.9
Summary: Estache, Laffont, and Zhang develop a model to analyze the effects 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 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. This paper—a product of the Office of the Vice President, Infrastructure Network—is part of a larger effort in the network to promote analytical work on emerging policy issues in infrastructure service delivery. https://elibrary.worldbank.org/doi/abs/10.1596/1813-9450-3421
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Books Vikram Sarabhai Library Rack 23-B / Slot 976 (0 Floor, East Wing) General Stacks 338.9 E8U6 (Browse shelf(Opens below)) Available 158480

Estache, Laffont, and Zhang develop a model to analyze the effects 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 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. This paper—a product of the Office of the Vice President, Infrastructure Network—is part of a larger effort in the network to promote analytical work on emerging policy issues in infrastructure service delivery.

https://elibrary.worldbank.org/doi/abs/10.1596/1813-9450-3421

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