Eduardo Engel

Regulating seaports is difficult in general, even more so for the weak regulatory institutions common in developing countries. For this reason some countries have awarded these facilities via Demsetz...

Competition In Or For The Field: Which Is Better?

It has become increasingly common to allocate highway franchises to the bidder that offers to charge the lowest toll. Often, building a highway increases the value of land held by a small group of...

In many circumstances, a principal, who wants prices to be as low as possible, must contract with agents who would like to charge the monopoly price. This paper compares a Demsetz auction, which...

Privatizing Roads: an "Old" New Approach to Infrastructure Provision

It has become increasingly common to allocate highway franchises to the bidder that offers to charge the lowest toll. Often, building a highway increases the value of land held by a small group of...

Could Higher Taxes Increase the Long-Run Demand for Capital?: Theory and Evidences for Chile

During most of the twentieth century, highways, tunnels and bridges were viewed as public goods that had to be provided by the government. By the end of the century, however, chronic budgetary...

Alvaro Bustos, Eduardo Engel, Alexander Galetovic

Is a tax increase always detrimental for capital formation? This paper estimates a long-run demand for capital in Chile, and studies the responsiveness of firms’ desired capital stock to variations...

Privatizing Highways in Latin America: is it Possible to Fix What Went Wrong?

Eduardo Engel, Alexander Galetovic, Ronald Fischer

This paper reviews the Latin American experience with highway privatization during the last decade. Based on evidence from Argentina, Colombia and Chile, we find that private financing of new...

Soft Budgets And Highway Franchising

Could Higher Taxes Increase the Long-Run Demand for Capital? Theory and Evidence for Chile"

Latin American governments progressively substituted build–operate–and–transfer (BOT) contracts for government–provided highways during the nineties. Because under BOT a private franchise...

Alvaro Bustos, Eduardo Engel, Alexander Galetovic

Competition In or For the Field: Which is Better

In many circumstances, a principal, who wants prices to be as low as possible, must contract with agents who would like to charge the monopoly price. This paper compares a Demsetz auction, which...

How to Auction an Essential Facility When Underhand Integration is Possible

It has become increasingly common to allocate highway franchises to the bidder that offers to charge the lowest toll. Often, building a highway increases the value of land held by a small group of...

Highway Franchising: Pitfalls and Opportunities

Regulating seaports is difficult in general, even more so for the weak regulatory institutions common in developing countries. For this reason some countries have awarded these facilities via Demsetz...

¿Cómo licitar una concesión vial urbana?

We build a conceptual framework to analyze the virtues and limitations of alternative mechanisms that can be used to auction a highway. We argue that current mechanisms, which fix the term of the...

Protección a los consumidores en Chile: ¿Por qué tan poco y tan tarde?

Análisis descriptivo del tamaño relativo del gasto del gobierno chileno.

Este artículo da a conocer las políticas de resguardo a los consumidores, para luego evaluar el grado de protección existente en Chile, tanto antes como después de la promulgación de la Ley del...

Eduardo Engel, Patricio Meller, Claudio Bravo

En este trabajo se examina el tamaño relativo del Gobierno chileno a través de una comparación internacional con valores equivalentes de otros países. Adicionalmente hay un análisis similar para...

Understanding Tax Evasion Dynamics

Eduardo Engel, James R. Hines Jr.

Americans who are caught evading taxes in one year may be audited for prior years. While the IRS does not disclose its method of selecting tax returns for audit, it is widely believed that a...

Impuestos y demanda por capital: Teoría y evidencia para Chile

Álvaro Bustos, Eduardo Engel, Alexander Galetovic

Este trabajo estima una demanda de largo plazo por capital en Chile, lo que permite estudiar la sensibilidad del stock de capital deseado por las empresas ante variaciones de las tasas de impuestos....

Privatizing Highways in the United States

Renegotiation without Holdup: Anticipating Spending and Infrastructure Concessions

Major increases in congestion over the last two decades, combined with troubled government finances, have made private toll-roads increasingly attractive in the United States. Road privatization...

Lumpy Investment in Dynamic General Equilibrium

Infrastructure concessions are frequently renegotiated after investments are sunk, resulting in better contractual terms for the franchise holders. This paper offers a political economy explanation...

Ruediger Bachmann, Ricardo J. Caballero, Eduardo Engel

Microeconomic lumpiness matters for macroeconomics. According to our DSGE model, it explains roughly 60% of the smoothing in the investment response to aggregate shocks. The remaining 40% is...

Renegotiation Without Holdup: Anticipating Spending and Infrastructure Concessions

Renegotiation without Holdup: Anticipating Spending and Infrastructure Concessions

Infrastructure concessions are frequently renegotiated after investments are sunk, resulting in better contractual terms for the franchise holders. This paper offers a political economy explanation...

Optimal Fiscal Strategy for Oil Exporting Countries

Infrastructure concessions are frequently renegotiated after investments are sunk, resulting in better contractual terms for the franchise holders. This paper offers a political economy explanation...

Eduardo Engel, Rodrigo O. ValdÃ©s

Fiscal policy , Oil exporting countries ,

Public-private partnerships (PPPs) cannot be justified because they free public funds. When PPPs are justified on efficiency grounds, the contract that optimally balances demand risk, user-fee distortions and the opportunity cost of public funds, features a minimum revenue guarantee and a revenue cap. However, observed revenue guarantees and revenue sharing arrangements differ from those suggested by the optimal contract. Also, this contract can be implemented via a competitive auction with realistic informational requirements. Finally, the allocation of risk under the optimal contract suggests that PPPs are closer to public provision than to privatization.

The Basic Public Finance of Public-Private Partnerships

Bundling, Cost of public funds, Demsetz auction, Minimum revenue guarantees, Privatization, Revenue and profit caps, Scope of government, Subsidies

The Basic Public Finance of Public-Private Partnerships

Public-private partnerships (PPPs) cannot be justified because they free public funds. When PPPs are desirable because the private sector is more efficient, the contract that optimally trades demand...

Highway Franchising: Pitfalls and Opportunities.

Engel, Eduardo, Fischer, Ronald, Galetovic, Alexander

Competition In or For the Field: Which Is Better?

The Basic Public Finance of Public-Private Partnerships

In many circumstances, a principal, who wants prices to be as low as possible, must contract with agents who would like to charge the monopoly price. This paper compares a Demsetz auction, which...

The Basic Public Finance of Public-Private Partnerships

Public-private partnerships (PPPs) cannot be justified because they free public funds. When PPPs are desirable because the private sector is more efficient, the contract that optimally trades demand...

Optimal Resource Extraction Contracts under Threat of Expropriation

Public-private partnerships (PPPs) cannot be justified because they free public funds. When PPPs are desirable because the private sector is more efficient, the contract that optimally trades demand...

Optimal Resource Extraction Contracts Under Threat of Expropriation

The government contracts with a foreign firm to extract a natural resource that requires an upfront investment and which faces price uncertainty. In states where profits are high, there is a...

Understanding Tax Evasion Dynamics

The government contracts with a foreign firm to extract a natural resource that requires an upfront investment and which faces price uncertainty. In states where profits are high, there is a...

Eduardo Engel, James Hines

Americans who are caught evading taxes in one year may be audited for prior years. While the IRS does not disclose its method of selecting tax returns for audit, it is widely believed that a...

Highway franchising and real estate values

Engel, Eduardo, Fischer, Ronald, Galetovic, Alexander

Privatizing Highways in the United States

A Pro-Market Agenda for El Salvador

We review the experience of both private toll-roads built in the United States during the 1990s, and argue that the problems they encountered could have been avoided if the length of the franchise...

Lumpy Investment in Dynamic General Equilibrium

This paper argues that, despite important productivity gains, reforms have benefited consumers much less than expected in El Salvador. Antitrust legislation, consumer protection and an adequate...

Ruediger Bachmann, Eduardo Engel, Ricardo Caballero

Microeconomic lumpiness matters for macroeconomics. According to our DSGE model, it is responsible for 92 percent of the smoothing in the investment response to aggregate shocks, and it introduces...

Aggregate Employment Dynamics: Building from Microeconomic Evidence

Ricardo J. Caballero, Eduardo Engel, John Haltiwanger

This paper studies quarterly employment flows of approximately 10,000 large U.S. manufacturing establishments. We use establishments' hours-week to construct measures of the deviation between desired...

Uvas envenenadas, vacas locas y proteccionismo

A New Mechanism to Auction Highway Franchises

Contar con una definición adecuada de "medida proteccionista" es importante tanto desde un punto de vista conceptual como práctico. Este trabao propone una nueva definición, según la cual la...

Dinámica de empleo y productividad en manufactura: Evidencia micro y consecuencias macro

Most developing-country governments lack resources to undertake urgent highway construction programs. This has led to the suggestion that private firms should be given franchises to build, finance,...

Alexis Camhi, Eduardo Engel, Alejandro Micco

Este trabajo estudia los flujos anuales de empleo y la productividad (media del trabajo) de un promedio anual de aproximadamente 3,500 plantas del sector manufacturero chileno durante el período...

Respuesta a Klein y Tirole

Ingeniería electoral en Chile

En esta nota respondemos a los comentarios de Michael Klein y Jean Tirole a nuestra propuesta de licitar concesiones viales interurbana por menor valor presente de los ingresos (MVPI). En la primera...

Eduardo Engel, Alejandro Neut

En una elección parlamentaria se desarrollan simultáneamente varias campañas electorales (una en cada distrito). Esto plantea a los partidos políticos el problema de cómo distribuir sus recursos...

Infraestructure Franchising and Government Guarantees.

Least-Present-Value-of-Revenue Auctions and Highway Franchising.

Government guarantees for private infrastructure projects reduce the incentives of firms to perform efficiently, weaken the incentives to screen projects for white elephants, and shift government...

Reforma tributaria y distribución del ingreso en Chile.

In recent years several countries have started massive highway franchising programs auctioned to private firms. In these auctions, the regulator typically sets the franchise term and firms bid on...

Eduardo Engel, Alexander Galetovic, Claudio Raddatz

Mediante una evaluación detallada de la estructura tributaria chilena vigente en 1996, mostramos que cambios bastante más drásticos que aquellos considerados en la discusión pública no afectan...

Taxes and Income Distribution in Chile: Some Unpleasant Redistributive Arithmetic.

Eduardo Engel, Alexander Galetovic, Claudio Raddatz

This paper quantifies the direct impact of taxes on income distribution at the household level in Chile and estimates the distributional effect of several changes in the tax structure. We find that...

¿Qué hacer con los impuestos que pagan las ganancias de capital en Chile?

Eduardo Engel, Alexander Galetovic

Este trabajo analiza cualitativamente las consecuencias económicas de los impuestos a las ganancias de capital actualmente vigentes en Chile. Se describen los tratamientos especiales que reciben los...

Nonlinear Aggregate Investment Dynamics: Theory and Evidence

Ricardo D. Caballero, Eduardo Engel

In this paper we derive a model of aggregate investment that builds from the lumpy microeconomic behavior of firms facing stochastic fixed adjustment costs. Instead of the standard sharp (S,s) bands,...

A Note on Enforcement Spending and Vat Revenues

Eduardo Engel, Alexander Galetovic, Claudio Raddatz

Estimating the impact of changes in enforcement spending is of interest to tax authorities and policymakers. The literature on tax compliance usually focuses on the effect that these changes have on...

Toll competition among congested roads

The Chilean Infrastructure Concessions Program: Evaluation, Lessons and Prospects for the Future

A growing number of roads are currently financed by the private sector via Build-Operate-and-Transfer (BOT) schemes. When the franchised road has no close substitute, the government must regulate...

How to Auction an Essential Facility when Underhand Integration is Possible

This paper describes and evaluates the Chilean infrastructure concessions program, which is one of the main economic innovations carried out by the center-left coalition of political parties that has...

Franchising of infrastructure concessions in Chile: A Policy Report

There are many industries in which potentially competitive segments require services provided by natural monopoly bottlenecks (essential facilities). Since it is difficult to regulate these...

Prediciendo el precio del cobre: ¿Más allá del camino aleatorio?

This report describes and evaluates the present state of the Chilean infrastructure concessions program. This program is leading to a complete upgrade of Chile's highway system and has been recently...

Eduardo Engel, Rodrigo Valdés

En este trabajo se compara la capacidad predictiva de mediano plazo (1 a 5 años) de una variada gama de modelos de series cronológicas para el precio del cobre. El criterio de comparación es el...

El cobre y la estrategia fiscal óptima para Chile

Alejandro Drexler, Eduardo Engel, Rodrigo Valdés

Este trabajo analiza la estrategia fiscal óptima para Chile, determinando el gasto total y fiscal de la economía, así como de la carga tributaria considerando (i) el problema de distribución...

Toll Competition Among Congested Roads

Optimal resource extraction contracts under threat of expropriation

Roads are being franchised to private firms in many countries, raising the issue of regulating the tolls they charge. When there is more than one road to get from one point to another, regulation...

Aggregate Implications of Lumpy Investment: New Evidence and a DSGE Model

The government contracts with a foreign firm to extract a natural resource that requires an upfront investment and which faces price uncertainty. In states where profits are high, there is a...

Ruediger Bachmann, Ricardo J. Caballero, Eduardo Engel

The sensitivity of U.S. aggregate investment to shocks is procyclical: the initial response increases by approximately 50% from the trough to the peak of the business cycle. This feature of the data...

Optimal Resource Extraction Contracts under Threat of Expropriation

Poisoned Grapes, Mad Cow, and Protectionism

This paper studies two episodes where an exporting industry saw its sales plummet after importing countries banned their products to protect their citizens' health. The first case is the poisoned...

Competition in or for the Field: Which is Better?

It has become increasingly common to allocate highway franchises to the bidder that offers to charge the lowest toll. Often, building a highway increases the value of land held by a small group of...

Adjustment is Much Slower than You Think

In many circumstances, a principal, who wants prices to be as low as possible, must contract with agents who would like to charge the monopoly price. This paper compares a Demsetz auction, which...

Ricardo J. Caballero, Eduardo Engel

In most instances, the dynamic response of monetary and other policies to shocks is infrequent and lumpy. The same holds for the microeconomic response of some of the most important economic...

Microeconomic Flexibility in Latin America

Ricardo J. Caballlero, Eduardo Engel, Alejandro Micco

We characterize the degree of microeconomic inflexibility in several Latin American economies and find that Brazil, Chile and Colombia are more flexible than Mexico and Venezuela. The difference in...

Renegotiation Without Holdup: Anticipating Spending and Infrastructure Concessions

The Basic Public Finance of Public-Private Partnerships

Infrastructure concessions are frequently renegotiated after investments are sunk, resulting in better contractual terms for the franchise holders. This paper offers a political economy explanation...

Optimal Resource Extraction Contracts Under Threat of Expropriation

Public-private partnerships (PPPs) cannot be justified because they free public funds. When PPPs are justified on efficiency grounds, the contract that optimally balances demand risk, user-fee...

Toll Competition Among Congested Roads

The government contracts with a foreign firm to extract a natural resource that requires an upfront investment and which faces price uncertainty. In states where profits are high, there is a...

Optimal Resource Extraction Contracts under Threat of Expropriation

A growing number of roads are currently financed by the private sector via Build-Operate-and -Transfer (BOT) schemes. When the franchised road has no close substitute, the government must regulate...

Engel, Eduardo, Fischer, Ronald

The government contracts with a foreign firm to extract a natural resource that requires an upfront investment and which faces price uncertainty. In states where profits are high, there is a...

The Basic Public Finance of Public-Private Partnerships

Engel, Eduardo, Fischer, Ronald, Galetovic, Alexander

Public-private partnerships (PPPs) cannot be justified because they free public funds. When PPPs are justified on efficiency grounds, the contract that optimally balances demand risk, user-fee...

Public-Private Partnerships: when and how

Renegociación de concesiones en Chile

When are public-private partnerships (PPPs) better than conventional provision and regulated privatization? And should PPP contracts be structured and governed when this is the case?. We show that...

Eduardo Engel, Ronald Fischer, Alexander Galetovic, Manuel Hermosilla

Este trabajo describe en forma sistemática los montos renegociados en las 50 concesiones cuyos datos han sido publicados por el MOP en su página web. Nuestra principal conclusión es que las...

Soft Budgets and Renegotiations in Public-Private Partnerships

Soft Budgets and Renegotiations in Public-Private Partnerships

Public-private partnerships (PPPs) are increasingly used to provide infrastructure services. Even though PPPs have the potential to increase efficiency and improve resource allocation, contract...

Soft budgets and Renegotiations in Public-Private Partnerships

Public-private partnerships (PPPs) are increasingly used to provide infrastructure services. Even though PPPs have the potential to increase efficiency and improve resource allocation, contract...