As for quality of service, the results achieved for the four semesters studied are insufficient to
conclude with any degree of certainty whether operators have provided a “good“ service or not.
What can be stated, however, is that the quality guidelines designed by the Superintendency of
Electricity are overly generous and should be reassessed in order to send the right messages to
operators and induce them to improve on the quality of the service provided.
In light of the results presented and particularly from the perspective of the poorest - which are
concentrated in rural areas - it is difficult to portray the transformation of the electricity industry
in Bolivia as “pro poor“. It has had discernible, positive effects in urban areas, particularly in
terms of coverage, but its effects on prices - both in cities and in the country - has been less than
ideal. While aware of the distortions created by subsidies, and continuining with the process of
reforms in the industry, it seems that tariff schemes whereby urban, wealthier consumers
subsidize rural consumers should be taken into consideration in order to make the industry more
beneficial to those that need it most. They could take the form of “rising block tariffs“ - also
known as lifeline subsidies - where the unit price of the service is cheaper for the first units of
consumption, up to levels considered sufficient to cover basic needs of poor households, and
subsequent blocks are charged their true economic cost or higher, to finance the poorest block.
Though far from the ideal solution, subsidization of the poorest seems to be a second-best
solution that applies just right to a country like Bolivia, where poverty indicators are so acute
despite remarkable structural reforms across the board.
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