JEL Code L: Industrial Organization - 1998

The privatization of Chile’s public utilities has led to substantial new investment and improvements in internal efficiency. However, the limited information available to regulators, combined with their insufficient technical capacity, have combined to prevent efficiency increases being fully passed on to consumers in price reductions. In fact, drastic price cuts have occurred only where competition has emerged, so achieving competition wherever possible should be the main policy goal. Competition can be enhanced by either modifying existing regulations, as happened in l ong-distance telecomunications, or by a more active antitrust policy. To achieve this, the regulatory institution clearly need Strengthening.