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Choosing the extent of private participation in public services: A computable general equilibrium perspective

Author

Listed:
  • Chisari, Omar O.
  • Lambardi, Germán D.
  • Romero, Carlos A.

Abstract

What determines the propensity to reduce or widen the extent of public ownership? Why has there been a tendency to privatise and concede public utilities during the nineties? The answers to these questions depend both on macroeconomic and microeconomic considerations. And correct answers could also help to avoid or prevent inefficient reversals and frustrations that jeopardize reform processes. An alternative perspective, that combines micro and macro arguments, is given by general equilibrium models. The objective of this paper is to explore the rationality of the decision of choosing the implicit “technologies” of private and public operators of utilities in an economy that has fiscal budget and trade balance in equilibrium. The simulations confirm that the choice of the technology to be used for servicing infrastructure depends on deep parameters of efficiency and costs. The model shows that there are plausible scenarios where the selection is not unique.

Suggested Citation

  • Chisari, Omar O. & Lambardi, Germán D. & Romero, Carlos A., 2007. "Choosing the extent of private participation in public services: A computable general equilibrium perspective," MPRA Paper 15358, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:15358
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    File URL: https://mpra.ub.uni-muenchen.de/15358/1/MPRA_paper_15358.pdf
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    References listed on IDEAS

    as
    1. Victor Ginsburgh & Michiel Keyzer, 2002. "The Structure of Applied General Equilibrium Models," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262571579, December.
    2. John B. Shoven & John Whalley, 1973. "General Equilibrium with Taxes: A Computational Procedure and an Existence Proof," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 40(4), pages 475-489.
    3. Chisari, Omar & Estache, Antonio & Romero, Carlos, 1999. "Winners and Losers from the Privatization and Regulation of Utilities: Lessons from a General Equilibrium Model of Argentina," The World Bank Economic Review, World Bank, vol. 13(2), pages 357-378, May.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Chisari, Omar O. & Maquieyra, Javier & Romero, Carlos A., 2009. "Liberalization of trade in services: A CGE analysis for Argentina, Brazil and Uruguay," MPRA Paper 15336, University Library of Munich, Germany.
    2. Lisa Bagnoli & Salvador Bertomeu-Sanchez & Antonio Estache & Maria Vagliasindi, 2023. "Does the ownership of utilities matter for social outcomes? A survey of the evidence for developing countries," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 26(1), pages 24-43, January.

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    More about this item

    Keywords

    Computable General Equilibrium; Trade balance; public services;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • L97 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Utilities: General

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