Public sector pricing policies : a review of Bank policy and practice

Abstract

Nearly a decade has passed since the Bank codified its position on cost recovery policies (OMS 2.25) for public sector projects. In a review of 13 sectors, the authors find that the Bank guidelines are followed fairly closely in seven sectors: coal, irrigation, oil/gas, power, roads, telecommunications, and water/sewerage. In the other six sectors the focus is heavily on either distributional (health, education, housing) or financial (fertilizer, ports, railways) concerns - with little attempt to incorporate economic pricing principles. Efficiency pricing is not irrelevant or impossible in these sectors, and - even if used only as a benchmark - could improve sector management and project selection and design.Environmental Economics&Policies,Economic Theory&Research,Health Monitoring&Evaluation,Public Sector Economics&Finance,Banks&Banking Reform