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Infrastructure Quality and the Subsidy Trap

McRae, Shaun

The American economic review, 2015-01, Vol.105 (1), p.35-66 [Periódico revisado por pares]

Nashville: American Economic Association

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Título:
Infrastructure Quality and the Subsidy Trap
Autor: McRae, Shaun
Assuntos: Colombia ; Consortia ; Consumption ; Demand ; Developing countries ; Electric utilities ; Electricity ; Energy consumption ; Government programs ; Government subsidies ; Household appliances ; Household consumption ; Households ; Housing demand ; Industrialized nations ; Infrastructure ; Investment subsidies ; Latin America ; LDCs ; Low income groups ; Neighborhoods ; Neighbourhoods ; Public infrastructure ; Squatter settlements ; Studies ; Subsidies ; Water
É parte de: The American economic review, 2015-01, Vol.105 (1), p.35-66
Notas: ObjectType-Article-1
SourceType-Scholarly Journals-1
ObjectType-Feature-2
content type line 23
Descrição: Electricity and water are often subsidized in developing countries to increase their affordability for low-income households. Ideally, such subsidies would create sufficient demand in poor neighborhoods to encourage private investment in their infrastructure. Instead, many regions receiving large subsidies have precarious distribution networks supplying users who never pay. Using a structural model of household electricity demand in Colombia, I predict the change in consumption and profits from upgrading low-quality electricity connections. I show that the existing subsidies, which provide greater transfers to areas with unreliable supply, deter investment to modernize infrastructure. Finally, I analyze alternative programs with stronger investment incentives.
Editor: Nashville: American Economic Association
Idioma: Inglês

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Infrastructure Quality and the Subsidy Trap

McRae, Shaun

Nashville: American Economic Association

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