Regulatory Governance and Chile's 1998-99 Electricity Shortage

Fischer, Ronald ; Galetovic, Alexander

World Bank, Washington, DC

关键词: BASES;    COMMERCIAL POLICY;    CONSUMERS;    DEMAND CURVE;    DROUGHT;   

DOI  :  10.1596/1813-9450-2704
RP-ID  :  WPS2704

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

In the early 1980s Chile reformed itselectricity sector, introducing a regulatory framework thatbecame influential worldwide. But in 1998 and 1999 La Ninabrought one of the worst droughts on record, causing a pricesystem collapse, random power outages, and three-hourrotating electricity cuts. The authors study the interactionbetween regulatory incentives and governance during the1998-99 electricity shortage, showing that the supplyrestriction could have been managed without outages. Theshortage can be blamed on a rigid price system, which wasunable to respond to large supply shocks, and on deficientregulatory governance, which led to a weak regulator unableto make the system work. The authors also show that theregulator's weakness stemmed not from lack of formalpowers but from vulnerability to lobbyists and a lack ofindependence. Moreover, the regulator seems not to havefully understood the incentives in the price system duringsupply restrictions. The authors conclude that the Chileanshortage shows the limitations of a rigid price systemrequiring heavy regulatory intervention. This suggests thatcountries whose governance structures are ill suited todealing with loopholes left by the law should rely as muchas possible on market rules that clearly allocate propertyrights ex ante and leave the terms of contracts to be freelynegotiated by private parties.