Technical efficiency gains from port reform : the potential for yardstick competition in Mexico

mmpPDFResearch PaperPort operationsCompetitionRegulatory reformMexicoWorld BankEstache, AntonioGonzalez, MarianelaTrujillo, LourdesNTL-MARINE/WATERWAYS TRANSPORTATION-Marine Economics and FinanceNTL-PLANNING AND POLICY-Technology TransferNTL-ECONOMICS AND FINANCE-Economic ImpactsNTL-MARINE/WATERWAYS TRANSPORTATION-PortsUS Transportation CollectionPorts are one of the key components of the logistics chain and, this is why the desire to cut costs in the sector is becoming a mainstream component of most transport policy reforms. The most common instrument relied on is the introduction of some type of competition to stimulate efficiency. This paper shows how relatively standard methodologies can help measure the efficiency gains from reform in the organization of ports infrastructures. It also shows how these measures can be used to promote competition between ports and be built-in incentive driven regulation. The illustration is based on a study of the effects of the 1993 Port reform in Mexico and is the first efficiency analysis of port restructuring in a developing country. It covers the 1996-1999 period and relies on a stochastic production frontier. It shows that, overall, Mexico has achieved 6-8% annual efficiency gains in the use of ports infrastructure since assigning their management to independent decentralized operators. The evolution of the relative performance rating is also quite revealing as it identifies consistent sets of leaders and laggards, including some which would not have been identified by partial productivity indicators commonly used in the sector. References, tables, 20 p