Regulatory issues in the privatization of public utilities: the chilean experience

Abstract

Between 1985 and 1989, the military government (1973-1990) carried out its third round of privatizations, focused on the so-called traditional public enterprises (PEs), i.e., enterprises created by the State itself and public utilities it had retained after they were seized by the socialist government in 1970-1973.’ The fact that most of the enterprises privatized in this round are public utilities raises some interesting economic issues. Public utilities have traditionally been considered natural monopolies. However, some public utility activities, such as power generation and long distance phone services, are liable to become competitive, and with technological change the list is increasing.