The current debate over the potential cost advantages of the private sector, while certainly relevant may divert attention from other major dimensions of the infrastructure privatisation decision. While the private sector sometimes may be able to build facilities faster and operate them at lower cost, financial considerations are not the only barrier to the provision of infrastructure. Siting, pricing and rate regulation are equally as important dimensions. The debate over cost advantages, moreover, often fails to distinguish between those savings that are net efficiency gains to society as a whole and those that represent transfers from one sector of society to another. To investigate these issues, this paper contrasts the US experience in the privatisation of highway and solid waste disposal facilities. (Author/publisher).
Abstract