The reform of the utilities sector in Argentina

The Privatization of the national public utilities that took place almost a decade ago in Argentina seem to be explained by the persisting deficits of the enterprises, a general dissatisfaction with their performance and the difficulties government faced in their control. During the period of private management, companies restructured their revenues by both regrouping consumers and raising their two-part tariffs unevenly, increased the number of customers and achieved perceptible quality improvements. For assessing the impact of the reforms in the telecomunications, electricity, natural gas and sanitation services upon residential consumers’ economic well being, welfare changes of the initial consumers and the surplus of the newcomers are estimated using household level data from the Gran Buenos Aires. The results obtained suggest that the direction as well as the intensity of welfare changes differ across income groups and services and that magnitudes vary according to the rigidity of demands; the benefits for the newcomers also differ across services but they seem to have had little significance in all cases, except in water and sewage. – privatization ; public utilities ; regulatory reform ; welfare changes ; consumer surplus