Power Sector Reform in Latin America: Accomplishments, Failures and Challenges
By Jaime Millán (05/06, IFM-144, En) See also Infrastructure and Financial Markets
It has recently become fashionable in political circles to question the success of the power sector reform efforts initiated 15 years ago by the countries of Latin America and the Caribbean. This is part of a more widespread movement against the Washington Consensus, the set of policy reforms undertaken during the nineties. While the motivation and rationale of these critiques are diverse, it is critical for an institution like the Inter-American Development Bank, which has supported and encouraged the reform efforts through its policies and strategies as well as in its lending, to ascertain the truth of these claims.
The Banks Energy Strategy (which was approved in 2000) encouraged Bank management to perform evaluations and appraisals of progress in implementing the reforms. Since the first comprehensive study published in Economic and Social Progress in Latin America 2000 (IPES), Bank staff have undertaken several studies of the energy sector. Some were published as books, such as Keeping the Lights On: Power Sector Reform in Latin America, some as part of related publications covering the infrastructure sector, and others as independent papers. Despite these earlier efforts, the dynamic nature of the subject demands revisiting the effectiveness of policies in order to guide staff action.
In this paper, Jaime Millán, a leading energy expert who was Principal Energy Economist at the Infrastructure and Financial Markets Division of the Bank, provides a well-timed update of the IPES review of the electricity sector. The paper incorporates the latest developments and provides additional descriptions and analysis of specific features that have proven to be difficult to deal with. The paper is an abridged version of a chapter in a forthcoming book that presents the sum of Jaimes 35 years of experience in the field. The forthcoming book (which will be published in Spanish) will provide food for thought on a subject of capital importance to the electricity sector in the region.
Last updated: 05/08/07
