Chile's experience shows that it is possible to design direct subsidies (such as Chile's subsidy for potable drinking water) at relatively low cost to the state and without distorting poor people's behavior. Prices have fallen substantially in services that new operators have entered, showing...

The author analyzes subsidies in Chile's public utilities. Over the last decade, especially, significant efforts have been made to extend public services to rural populations. An explicit consumption subsidy for potable water (targeted to the poorest twenty percent of the population) currently...

Public-private partnerships (PPPs) cannot be justified because they free public funds. When PPPs are desirable because the private sector is more efficient, the contract that optimally trades demand risk, user-fee distortions and the opportunity cost of public funds is characterized by a minimum...

Public-private partnerships (PPPs) cannot be justified because they free public funds. When PPPs are desirable because the private sector is more efficient, the contract that optimally trades demand risk, user-fee distortions and the opportunity cost of public funds is characterized by a minimum...