Subsidios al consumo de los servicios públicos en Colombia: ¿Hacia dónde nos movemos?

Abstract

"The Colombian utilities pricing system uses cross subsidies between households. The purpose of this paper is to evaluate the performance of such system in urban areas regarding electricity, telephone and water services. In order to do this, coverage, targeting and redistribution measures are used. The impact of subsidies on households real income and the financial sustainability of the system are also considered as performance criteria. All the evidence shows that the strata based system is not a progressive scheme, does not allocate benefits in a proper way and produces a significant financial deficit covered by utilities enterprises and the government. All this evidence suggests that the current subsidies system should be reformed. This paper presents several options in order to do so."