Provision of Public Services and Welfare of the Poor: Learning from an Incomplete Electricity Privatization Process in Rural Peru

The incomplete privatization of the electric sector in Peru provides a unique scenario for evaluating the impact of public versus private provision. The results in this paper suggest that management of electricity firms by the private sector leads to a significant improvement in the quality of the provision of electricity. These improvements in quality and supply of electricity provision yield some efficiency gains in terms of the time allocation of the working labor force that can be directly linked to the use of electricity. Rural households under private provision of electricity had more opportunities to work in non-farm activities, and as a result, the share of time in non-farm activities increased, indicating both a substitution effect and a potential price effect through higher non-farm wages. The substitution effect implies a reduction of hours spent on farm activities in favor of non-farm activities, and the price effect implies that households will receive higher salaries and therefore will need to work fewer hours in total. As a result, the increase in time spent on non-farm activities was accompanied by a reduction of hours spent on farm activities and an increase in hours spent on leisure.

Working and Studying in Rural Latin America: Critical Decisions of Adolescence

This paper evaluates the determinants of school attendance and work of rural adolescents between 10 and 18 years old in 1997-1998 for a sample of Latin American countries. Rural adolescents are quite disadvantaged relative to their urban counterparts. The share of rural adolescents studying while concurrently working part-time is significantly higher, household income is significantly lower, “supply-side” issues are an important factor in rural non-attendance, and to the extent that the educational attainment of the parents creates inter-generational persistence we find that rural youth are starting from a disadvantaged position. We present some statistical analysis that highlights these problems and also perform bivariate binary estimation to identify the determinants of these decisions. We find that for most countries critical determinants for making these choices are household income and parental education as well as household composition. Further, we find that there is evidence of a significant “trade-off” between working and studying. Finally, inter-generational factors allow for both a virtuous cycle and a vicious cycle.

Book Review: The Air War in Vietnam

Author: Michael E. Weaver Reviewed by Vince Alcazar, Air Force (retired) planner and fighter pilot, Department of Defense The Air War in Vietnam addresses President Lyndon B. Johnson’s administration’s use of airpower (or lack of it) and why American airpower underperformed, as well as airpower innovations that influenced the US warfare model in the Vietnam War. The reviewer bills this work as “…an indispensable volume of airpower scholarship. It is a richly developed analysis of airpower in a decade-long war with challenging hybrid characteristics and shifting US strategies.”https://press.armywarcollege.edu/parameters_bookshelf/1025/thumbnail.jp

The Buenos Aires water concession

The signing of a concession contract for the Buenos Aires water and sanitation system in December 1992, attracted worldwide attention, and caused considerable controversy in Argentina. It was one of the world's largest concessions, but the case was also interesting for other reasons. The concession was implemented rapidly, in contrast with slow implementation of privatization in Santiago, for example. And reform generated major improvements in the sector, including wider coverage, better service, more efficient company operations, and reduced waste. Moreover, the winning bid brought an immediate 26.9 percent reduction in water system tariffs. Consumers benefited from the system's expansion and from the immediate drop in real prices, which was only partly reversed by subsequent changes in tariffs, and access charges. And these improvements would probably not have occurred under public administration of the system. Still, the authors show information asymmetries, perverse incentives, and weak regulatory institutions could threaten the concession's sustainability. Opportunities for the company to act opportunistically - and the regulator, arbitrarily - exist, because of politicized regulation, a poor information base, serious flaws in the concession contract, a lumpy and ad hoc tariff system, and a general lack of transparency in the regulatory process. Because of these circumstances, public confidence in the process has eroded. The Buenos Aires concession shows how important transparent, rule-based decision-making is to maintain public trust in regulated infrastructure.Health Economics&Finance,Environmental Economics&Policies,Water Conservation,Water and Industry,Decentralization,Town Water Supply and Sanitation,Environmental Economics&Policies,Water and Industry,Water Supply and Sanitation Governance and Institutions,Water Conservation