Public-private partnerships (PPPs) cannot be justified because they free public funds. When PPPs are desirable because the private sector is more efficient, the contract that optimally trades demand risk, user-fee distortions and the opportunity cost of public funds is characterized by a minimum...

Regulating seaports is difficult in general, even more so for the weak regulatory institutions common in developing countries. For this reason some countries have awarded these facilities via Demsetz auctions, to the port operator that bids the lowest cargo-handling fee. A major concern with...

This paper reviews the Latin American experience with highway privatization during the last decade. Based on evidence from Argentina, Colombia and Chile, we find that private financing of new highways freed up fewer public resources than expected because public funds were often diverted to bail...

In the early 1980s Chile reformed its electricity sector, introducing a regulatory framework that became influential worldwide. But in 1998 and 1999 La Ni?a brought one of the worst droughts on record, causing a price system collapse, random power outages, and three-hour rotating electricity...

Energy policy makers usually ignore the response of the demand for electricity to changing prices because they believe that the price elasticity is nil. We show that a “small” price elasticity of demand generates “large” changes in energy shortage probabilities and generation costs when...

Este trabajo estudia formalmente si la ley eléctrica contenía precios suficientes para administrar sin cortes y eficientemente caídas drásticas de la cantidad ofrecida de energía y daba los incentivos correctos para invertir en capacidad de reserva. También analizamos en detalle las...

Este trabajo analiza la crisis eléctrica de 1998-1999. Su principal conclusión es que el diagnóstico habitual que sostiene que ocurrió porque las empresas no invirtieron y el regulador no tenía atribuciones, es equivocado. A pesar de la peor sequía del siglo y de la falla de la central...

This paper quantifies the direct impact of taxes on income distribution at the household level in Chile and estimates the distributional effect of several changes in the tax structure. We find that income distributions before and after taxes are very similar (Gini coefficients of 0.488 and...

We study the determinants of market structure in financial intermediation markets when property rights over information are weak. We show that incentives to gather information to screen firms can be preserved in decentralized markets with more than one intermediary. Local monopoly power is...