Regulatory lag, efficiency, and performance. Lessons from a case study
Carlos F. Ceballos Ferroglio,
Gustavo Ferro,
Ángel Enrique Neder
Abstract:Our main contribution is to identify the risks implied by the existence of prolonged regulatory lags. We hypothesize that a likely first response is to reduce OPEX, increasing efficiency. If the lag persists for enough time, a vicious circle of inefficiency, disinvestment, and reduced performance can follow. We use a regulatory episode affecting natural gas distributors in Argentina as a natural experiment, controlling with other Latin American countries’ utilities not exposed to the same regulatory stimuli. W… Show more
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