Technical Efficiency Gains from Port Reform : The Potential for Yardstick Competition in Mexico
The authors show how relatively standard methodologies can help to measure the efficiency gains from reforming the organization of port infrastructure, how those measures can be used to promote competition between ports, and how competition can be...
| Main Authors: | , , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2001/07/1551999/technical-efficiency-gains-port-reform-potential-yardstick-competition-mexico http://hdl.handle.net/10986/19578 |
| Summary: | The authors show how relatively standard
methodologies can help to measure the efficiency gains from
reforming the organization of port infrastructure, how those
measures can be used to promote competition between ports,
and how competition can be built into an incentive-driven
regulatory regime. As illustration, they use a case study of
port reform in mexico in 1993, the first efficiency analysis
of port restructuring in a developing country. Their
analysis, which covers 1996-99 and relies on a stochastic
production frontier, shows that overall, Mexico has achieved
annual efficiency gains of 6-8 percent in the use of port
infrastructure since assigning its management to
independent, decentralized operators. Changes in relative
performance ratings are revealing. They identify consistent
sets of leaders and laggards, including some that would not
have been identified by partial productivity indicators
commonly used in the sector. The authors' main
conclusions: 1) Reforms have significantly improved average
port performance. 2) The analytically sound performance
rankings allowed by the port-specific efficiency measures
can help to promote yardstick competition in the sector.
These rankings are superior to those that would emerge from
use of partial productivity indicators. They account for the
joint effects of all inputs on outputs--which is crucial,
because it avoids the risk of inconsistent rankings based on
different partial indicators, arbitrarily chosen. Developing
the database method to measure efficiency in countries with
no strong tradition of database development is an enormous
task--especially in transport sectors, where the tradition
of generating databases useful to policymakers is in its
infancy. The most immediate effect of this exercise was to
reveal the poverty of the database in the Mexican port
sector and the need for regulators to invest in its development. |
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