Updating Infrastructure Regulation for The 21st Century in Latin America and the Caribbean
This paper argues that, while most countries in Latin America and the Caribbean have managed to significantly improve the short-term efficiency of their infrastructure services since the widespread liberalization of the 1990s, they have been slow to ensure a fair distribution of the gains. They have also been slow in making the investments needed to ensure the prospects of future generations, including by protecting the environment for the long term. The paper places at least part of the blame on regulatory failures. It also shows how past mistakes can be corrected by the significant sectoral transformations, driven by new technologies, now underway. Digitalization is altering the economic characteristics of infrastructure services. Resulting changes in governance and financing options demand adjustments to economic regulations, including by broadening the regulatory toolkit to integrate new insights offered by developments in behavioral economics.