Economics of public utilities, a view from efficiency and equity

Abstract

This article contributes to the discussion about equity and efficiency as a contribution to economic analysis, in the framework of residential public utilities in Colombia. Based on a critical review, it is found that the criterion of equity as a right to the provision of these services is not reached, because the provider understands the service from the point of view of the market (supply is based on demand) and not from the social benefit that its consumption represents. Likewise, the regulation and the decentralized form in which these resources are managed have generated different resultsin terms of efficiency and equity in the regions, given that the differences regarding population density, cultural characteristics and citizens’ participation in processes of change have not been taken into account.