Price Caps, Efficiency Payoffs, and Infrastructure Contract Renegotiation in Latin America
Article from: TDM 2 (2007), in Infrastructure Investment & Dispute Management
Introduction
Twenty years ago, as the United Kingdom was getting ready to launch the privatization of its public services, Professor Littlechild developed and operationalized the concept of price caps as a regulatory regime to control for residual monopoly conditions in these services. Ten years later, Latin American countries, as they embarked into their own infrastructure reforms, also adopted the price cap regulatory model. Relying on a large data base on the factors driving contract renegotiation in the region and a survey of the literature on efficiency gains, Estache, Guasch, and ...