Public infrastructure performance in developing countries

This study examines how Pakistan's electricity and telecommunications industries have performed, looking at both individual companies and the sectors as a whole. Its goal is to locate inefficiencies and measure how large they are. The author argues that physical, financial, or productivity measures on their own cannot capture the dual role public infrastructure plays, so the work combines financial and productivity indicators in its assessment.

The analysis applies a Cobb-Douglas production function to estimate how total factor productivity has changed over time. It also looks at economies of scale in electricity generation.

The findings challenge a common argument for privatization: that state-owned enterprises should be sold because they lose money. For Pakistan's power and telecom firms, that argument does not hold. Their financial results look acceptable, but the book attributes this to subsidies, including cheap loans and grants, rather than to strong operating efficiency.