Private Provision of Rural Infrastructure Services: Competing for Subsidies
Market-oriented reforms of infrastructure in developing countries tend to focus primarily on commercially viable services in urban areas. Nevertheless, an increasing number of countries are beginning to experiment with extending the market paradigm to infrastructure services in rural areas that are often less attractive in commercial terms. In these cases, subsidies are used to close the gap between market requirements and development needs, and are increasingly determined and allocated on a competitive basis. The authors discuss the conditions under which competition among firms for such subsidies-successfully used in the telecommunications sector in a number of middle-income countries-could also be applied to electricity, water and sanitation, and transportation services in lower-income countries.
Summary: | Market-oriented reforms of
infrastructure in developing countries tend to focus
primarily on commercially viable services in urban areas.
Nevertheless, an increasing number of countries are
beginning to experiment with extending the market paradigm
to infrastructure services in rural areas that are often
less attractive in commercial terms. In these cases,
subsidies are used to close the gap between market
requirements and development needs, and are increasingly
determined and allocated on a competitive basis. The authors
discuss the conditions under which competition among firms
for such subsidies-successfully used in the
telecommunications sector in a number of middle-income
countries-could also be applied to electricity, water and
sanitation, and transportation services in lower-income countries. |
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