2006年-世界发展银行全球_The_Impact_of_Privatization_on_the_Performance_of_the_Infrastructure_Sector___The_Case_of_Electricity_Distribution_in_Latin_American_Countries_28页_346kb

Summary of "The Impact of Privatization on the Performance of the Infrastructure Sector: The Case of Electricity Distribution in Latin American Countries"

Core Content

This paper investigates the impact of privatization on the performance of electricity distribution firms in ten Latin American countries. It focuses on 116 firms that underwent ownership changes during the 1990s and evaluates their performance across three distinct periods: the "pure public" period (three years before privatization), the "transition" period (the year of reform announcement to one year after privatization or concession), and the "pure private" period (three years post-privatization). The study employs two methodologies: one based on means and medians of performance indicators across periods, and another using an econometric model with fixed effects and firm-specific time trends.

Main Contributions

• First systemic analysis: It is the first comprehensive analysis of the impact of privatization on the electricity distribution sector in Latin America.
• Unbalanced panel data: The study constructs an unbalanced panel dataset of key performance indicators for each country.
• Broad indicators: It evaluates a wide range of indicators, including output, employment, productivity, efficiency, quality, coverage, and prices.
• Longer time frame: Unlike previous studies, it covers a longer period, allowing for the identification of both short- and long-run effects of privatization.
• Counterfactual analysis: The study uses trend analysis to account for the counterfactual, i.e., what would have happened without privatization.

Key Findings

• Initial improvements during transition: Privatization leads to significant improvements in labor productivity, efficiency, and service quality during the transition period.
• Modest improvements in pure private period: After the transition, the improvements are much more modest, suggesting that the most substantial changes occur during the reform process itself.
• Employment reduction: There is a notable reduction in employment during the transition period (9.9% per year), with a smaller decline in the pure private period (2.1% per year).
• Coverage and output: When firm-specific time trends are considered, there is no significant change in coverage or output post-privatization, indicating that these outcomes may not be directly affected by ownership change.
• Price trends: Prices tend to rise, but the results are not strong, and the interpretation of price changes may be misleading without controlling for firm-specific trends.
• Quality improvements: There is a significant improvement in service quality, as measured by the frequency and duration of interruptions, during the transition period.

Methodology Overview

• Two methodologies: The paper applies both a descriptive approach using means and medians and an econometric model that includes firm fixed effects, firm-specific time trends, and heteroscedasticity corrections.
• Time trend corrections: The inclusion of firm-specific time trends is critical for accurate interpretation of results, particularly for indicators like coverage and output.
• Functional form: The analysis uses a semi-logarithmic model, where the percentage impact is calculated as $e^{\delta} - 1$.
• Feasible GLS approach: To correct for potential nonspherical errors, the study uses a Feasible Generalized Least Squares (FGLS) method, replacing the unknown variance matrix with a consistent estimator.

Data Description

• Sources: Data were collected from official reports, regulatory agencies, and firm disclosures. Additional sources included OLADE publications.
• Indicators: The study evaluates several key indicators:
  • Output: Total number of subscribers and total energy sold.
  • Labor: Number of employees and labor productivity.
  • Efficiency: Distributional losses.
  • Quality: Average duration and frequency of service interruptions.
  • Coverage: Number of residential subscribers per 100 households.
  • Prices: Average tariffs for residential services in both USD and local currency.
• Sample size: The dataset includes 116 firms and 1,103 firm-year observations, with at least one year of pre-privatization data for each firm.
• Normalization: The data were normalized, with the value of 100 assigned to the first year of privatization to facilitate comparison.

Conclusion

The study finds that privatization leads to significant short-term improvements in firm performance, particularly in labor productivity, efficiency, and service quality. However, the long-term benefits are more modest, suggesting that the most impactful changes occur during the transition phase. The results also highlight the importance of controlling for firm-specific trends to avoid misleading conclusions about the effects of privatization. The paper contributes to the literature by providing a more nuanced and comprehensive understanding of the effects of privatization in the electricity distribution sector of Latin America.