On Latin America’s Infrastructure Experience: Policy Gaps and the

A central conclusion of studies on infrastructure privatization in Latin America is that the poor will eventually gain via increased access.1 How-ever, when infrastructure services are turned over to private owners, the poor can lose in many ways over the short term. Reforms can result in losses for the poor, as opposed to the nonpoor. Reducing the major policy gaps that can create such losses, while maintaining the economic gains from pri-vatization, is the main topic of this chapter. The gaps discussed include lack of care in documenting the initial conditions of public services before their reform, including the degree of regressivity that previ-ously characterized the financing of service delivery; lack of a much needed distinction between access and affordability; failure to account for the weakness of safety nets during the difficult transitions associated with reform; failure to recognize the distortions caused by all levels of government in using these sectors as tax handles; 8 Antonio Estache is a senior economic adviser at the Infrastructure Vice-Presidency of the World Bank. This chapter is based on comments made at the conference, The Distributional Consequences o