Powering Up Developing Countries through Integration?
Power market integration is analyzed in a two-country model with nationally regulated firms and costly public funds. If the generation costs between the two countries are too similar, negative business stealing outweighs efficiency gains so that, subsequent to integration, welfare decreases in both...
Main Authors: | , |
---|---|
Format: | Journal Article |
Language: | en_US |
Published: |
Oxford University Press on behalf of the World Bank
2016
|
Subjects: | |
Online Access: | http://hdl.handle.net/10986/24602 |
id |
okr-10986-24602 |
---|---|
recordtype |
oai_dc |
spelling |
okr-10986-246022021-04-23T14:04:23Z Powering Up Developing Countries through Integration? Auriol, Emmanuelle Biancini, Sara economies of scale elasticity externalities infrastructure public utilities regional integration power market national regulation Power market integration is analyzed in a two-country model with nationally regulated firms and costly public funds. If the generation costs between the two countries are too similar, negative business stealing outweighs efficiency gains so that, subsequent to integration, welfare decreases in both regions. Integration is welfare enhancing when the cost difference between two regions is large enough. The benefits from export profits increase the total welfare in the exporting country, whereas the importing country benefits from a lower price. In this case, market integration also improves incentives to invest compared to autarchy. The investment levels remain inefficient, however, especially for transportation facilities. Free riding reduces incentives to invest in these public-good components of the network, whereas business stealing tends to decrease the capacity to finance new investment. 2016-07-05T17:24:19Z 2016-07-05T17:24:19Z 2015-01 Journal Article World Bank Economic Review 1564-698X http://hdl.handle.net/10986/24602 en_US CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Oxford University Press on behalf of the World Bank Publications & Research :: Journal Article Publications & Research |
repository_type |
Digital Repository |
institution_category |
Foreign Institution |
institution |
Digital Repositories |
building |
World Bank Open Knowledge Repository |
collection |
World Bank |
language |
en_US |
topic |
economies of scale elasticity externalities infrastructure public utilities regional integration power market national regulation |
spellingShingle |
economies of scale elasticity externalities infrastructure public utilities regional integration power market national regulation Auriol, Emmanuelle Biancini, Sara Powering Up Developing Countries through Integration? |
description |
Power market integration is analyzed in a two-country model with nationally regulated firms and costly public funds. If the generation costs between the two countries are too similar, negative business stealing outweighs efficiency gains so that, subsequent to integration, welfare decreases in both regions. Integration is welfare enhancing when the cost difference between two regions is large enough. The benefits from export profits increase the total welfare in the exporting country, whereas the importing country benefits from a lower price. In this case, market integration also improves incentives to invest compared to autarchy. The investment levels remain inefficient, however, especially for transportation facilities. Free riding reduces incentives to invest in these public-good components of the network, whereas business stealing tends to decrease the capacity to finance new investment. |
format |
Journal Article |
author |
Auriol, Emmanuelle Biancini, Sara |
author_facet |
Auriol, Emmanuelle Biancini, Sara |
author_sort |
Auriol, Emmanuelle |
title |
Powering Up Developing Countries through Integration? |
title_short |
Powering Up Developing Countries through Integration? |
title_full |
Powering Up Developing Countries through Integration? |
title_fullStr |
Powering Up Developing Countries through Integration? |
title_full_unstemmed |
Powering Up Developing Countries through Integration? |
title_sort |
powering up developing countries through integration? |
publisher |
Oxford University Press on behalf of the World Bank |
publishDate |
2016 |
url |
http://hdl.handle.net/10986/24602 |
_version_ |
1764457158434357248 |