Resumen:
This paper analyses the privatization of utilities in Bolivia, detailing the particularities
of the capitalization mechanism which was used for this purpose. The analysis suggests
that capitalization and regulation, and the liberalization of the utilities sector more
generally, succeeded in attracting foreign investment, thus fulfilling one of the central
goals of the reforms of this sector. Foreign investment made possible the increase in
access to basic services in urban areas, although access in rural areas still remains very
low. In terms of connection, service expansion in the urban areas did not bypass the
poor. On the contrary, in some cases, access improvements appear to have been
particularly beneficial to low-income households. Some reform-related price increases
did have adverse welfare effects. Nevertheless, the findings in this area are affected by
data limitations, and in any case do not seem to outweigh the benefits brought about by
greater access.
