Franchising and privatization
Home // Business // Franchise
File Size: 177.09 KB
Category: Business & Franchise
Source: rru.worldbank.org
Competition through bidding ensures minimum selling prices because the winning
franchisee will lower prices until revenues just cover costs.
Share this info:
Content Inside:
PriPvUBLaIC tPOeLICY FOR THE sector The World Bank March 1995 Note No. 40 Franchising and Privatization Antony W. Dnes Increasing private sector participation to improve the efficiency of infrastructure services is a growing trend around the world. This trend reflects dissatisfaction with state solutions, ever- tightening government budgets, technical change, and policy innovation. One approach to in- creasing private participation that is attracting much interest is franchise bidding schemes. Improved understanding of franchise contracting techniques could foster the successful revival and development of Sir Edwin Chadwick’s idea of competition for the field. Competition for the field the most attractive terms—for example, the lowest price to consumers. Competition Some elements of most infrastructure activities through bidding ensures minimum selling exhibit “natural monopoly” characteristics, prices because the winning franchisee will meaning that one or more services or products lower prices until revenues just cover costs. can be produced most cheaply by a single firm. Franchising schemes also may avoid pitfalls Examples include electricity transmission and associated with traditional regulation of such distribution and gas and water pipelines. This industries or with their nationalization. raises the issue of organizing an infrastructure industry so as to gain the advantages of pro- Letting monopoly franchises has a long his- duction by a single firm, without encouraging tory: France and Spain, for example, have been monopolistic conduct. Happily, not all elements letting water concessions for over one hundred of infrastructure exhibit natural monopoly char- years. With the recently increasing interest in acteristics. Market competition is both possible private participation in infrastructure, franchis- and highly desirable in many activities, such ing has taken root in power, solid waste, tele- as electricity generation and long-distance and communications, and water enterprises in cellular telephony. developing countries as diverse as China, Guinea, Hungary, and Mexico. In a recent case Sir Edwin Chadwick, a Victorian social re- closely resembling the Chadwick/Demsetz pro- former, proposed a franchise solution to prob- posal, Buenos Aires awarded a water conces- lems of natural monopoly, an approach later sion to the company offering the lowest promoted by Harold Demsetz in the United evaluated price, which was notably 20 percent States.1 Chadwick distinguished between com- or more below the price previously charged petition “within the field” and “competition by the state-owned water company. for the field.” Where competition is not pos- sible within an industry, Chadwick surmised, Natural monopoly competition for the right to be the natural monopolist may be an adequate substitute. To examine natural monopoly at its most un- The essential idea is that monopoly franchises adorned, consider an industry in which de- could be auctioned off to the bidder offering creasing cost gives rise to natural monopoly. Private Sector Development Department ▪ Vice Presidency for Finance and Private Sector Development
Comments
Related PDF Files
Today Terms
About Drilling machine seminer project, how to cite FASB website, harga sepeda motor honda, metan mt2 indir, Divar reset password, governing system of turbine, how to bypass evo immobiliser, mt2 energy, gambar ford f150, beyond bluetooth instructions, warmingmt2.com, lemon mt2 download, farm information in marathi, DURGGOV, harga lancer evo 9 indonesia, cisco 8485 DVB, BK-600 pair, foto motor drak, MOTOR DERAK, xtreme MT2 homepage, mercyslk200, block diagram of fire alarm system, yamaha mio sion, harga tzr50, PENNGERTIAN CROSS PLATFORM, peugeot 206 cd stacker pin configuration, learn baloon magic tricks in urdu, BK600 manual, Milling machine seminar report, www.limemt2.tk, T%C4%B0GGER MT2, g lens vs T* lens AND sony, harga honda jazz, matrix mt2 registration, jual audi a4 2002, block diagram of burglar alarm circuit, hargashockbreakermotorhondasuprafit, installing Parallels ToolsFedora 13, Ogilvy on Advertising torrent, sepering tes, modivikasi moto honda 70, cash mt2, Stiker Honda supra , 13 august 2010 kalnirnay, energy mt2 site, modifikasi supra x 2003, foto-foto motor loadrace, electrical turbine motor water, the narnia cookbook pdf, block diagram of burglar alarm, uh-60 operators manual pdf, mobil lancer 2004 bekas, physiotherapy ppt on polio, Sealux d90 price, NZ drunk driving 2010 statistics, mt2 legacy, Sealux d90, gambar mesin injeksen, harga mobil mazda rx8 tahun tertua, hr activities ppt, wind turbine VHDL ams model, harga mobil Mercedes-Benz SLK, hargamotorscopy, blackberry bold manual email reconciliation, mercy c200 th 2004, algorithms in endocrinology, matrixmt2.net download games, physiotherapy of multiple sclerosis ppt, mt2 dynasty, gambarmegapronew, harga Isuzu panther tahun 1994, Dark Revolution 2 Mt2, w3.schools.com oracle contents, Dark-Revolution2 Mt2, Dark Revolution 2 Mt2, Yearbook of Endocrinology download, allnewmuranoindonesia, lemmon mt2 indir, Pdf environmental projects in marathi, download Microbiology:Principles and Applications, semens analysis ppt, Harga cover body honda supra fit 2004, statistical quality control pdf rapidshare, foto honda megapro, free magic tricks in urdu, vixion harga scen, ckd np blansko oil pump, more...