They also discuss how to design pricing to accommodate the obligation to provide universal service. Producers and users are often widely scattered, geographically. Close financial integration of networks is justified on the basis of economies of scope and scale and the benefits from pooling and coordinating. Challengers of this practice contend that the inefficiency resulting from lack of competition outweighs the gain from economic integration. With reform, some competitive mechanisms can be introduced even when monopoly seems the best option for delivering a service.
Competition begins with the unbundling of various stages of delivery.
Then competitive bidding is popular, with the public authority keeping property rights on productive assets but conceding their operation to a private firm. In liberalizing the delivery of a service, policymakers must consider not only efficiency but also social and fiscal feasibility. Crampes and Estache discuss how relevant information asymmetry is in contract design and the award and regulatory processes. They also discuss how to design pricing to accommodate the obligation to provide universal service. To illustrate, they describe Argentina's experiment in liberalization, which is increasingly viewed as a model for changing private sector and government involvement in infrastructure services.