In Peru, Tariffs Shore Up The Monopolies

Gary Becker asserted that companies in small nations are no longer bound by the small scale of their limited domestic market ("There's nothing natural about `natural' monopolies," Economic Viewpoint, Oct. 6). As an example, he cited the case of how Chilean power companies now operate in other Latin American countries.

If it's true that those countries are not interconnected, given the huge distances involved, the source of profits could not be the scale of their production. No doubt some administrative expenses are being reduced and spread over a larger market. But the significant factor is the regulation applied to determine the tariffs paid by consumers. In the case of Peru, those tariffs have been going up steadily.

Nissim Alcabes


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