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Infrastructure pricing policies and the public revenue in African countries Export

World Development, Vol. 17, No. 4. (April 1989), pp. 525-542.

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The paper shows that the public revenue constraint on economically and socially desirable programs in Africa could be greatly relaxed through the adoption of cost-reflecting pricing policies for physical infrastructure services -- roads and drainage, water and sewerage, electricity, and telecommunications. Currently, the prices of infrastructure services are frequently below both economic costs and what is needed to finance investment, operating and maintenance expenditures. The services generate poor financial returns, and absorb much public finance, when in practice they are capable of earning appreciable surpluses. The paper discusses the benefits of reforming infrastructure pricing policies, the institutional and other difficulties of bringing reforms into effect, and finally makes some proposals. Although much of the analysis relates to Africa, several of its findings apply more generally.


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