International Infrastructure : Neglected at Our Peril

This paper describes the constellation of factors affecting infrastructure investments and utility operations. Independent regulatory commissions exercise most direct control over two factors: governance (agency design and processes) and regulatory policies (or incentives). Other factors are generally outside the regulatory domain but may influence or be influenced by regulatory governance and policies. These other factors include institutional conditions, national experience, perceptions of risk, and industry conditions - as they affect the structure, behavior, and performance of utilities. In addition, corporate governance determines the way private and public suppliers provide information and respond to incentives. Ultimately, the legitimacy and credibility of the regulatory system depends on how closely infrastructure performance matches realistic national objectives. Weak performance does not bode well for global security in the future