_5_ sustained as a matter of process and that this, in turn, requires a regular assessment of the relative performance of the main ports, therefore creating the basis of a system of yardstick competition. It turns out that five years have just passed since the beginning of the reform and that enough data is available to make a fair assessment of absolute and relative efficiency improvements in the main Mexican ports.

# 3. A **brief survey of efficiency measures in the port sector**

The efficiency literature on ports' performance is relatively modest in comparison to the efficiency literature available on other infrastructure activities. It is evolving however and can be classified into two main groups.<sup>5</sup> The first covers partial indicators of productivity in the port system but presents only a very limited view of efficiency zooming on specific ports. The second, more recent and much less developed, adopts the types of approaches recommended by this paper.<sup>6</sup> The literature covering partial indicators of port productivity continues to prevail among practitioners as revealed by a random look at annual reports published by port authorities<sup>7</sup> . The more academic literature adopting this approach to focus on specific ports spans over a 15 years period starting in the early 1980s after which a first attempt at using these indicators for inter-port comparisons was suggested by Tongzon (1995) and Talley (. Their approach was quite simple and consisted in defining a set of comparable indicators. Heaver (1995) or the Australian Productivity Commission (1998) went further and used comparable indicators to try to see how inter-port competition could be promoted analytically. Similar studies relevant to the concerns of a regulator include the study of scale economies by Jara et al. (1997) or Cullinane and Khanna (1998). Fernandez et al. (1999) also covers the effects of privatization. While all these studies generate useful insights on the performance of ports and the factors driving their costs, their main drawback was their partial view and the failure to recognize the need to have an analytically consistent approach to efficiency measurement.

The second generation of studies relying on formal measures of efficiency is an attempt to address this failure. It is still too recent to have generated many publications. However, the diversity of approaches followed by the relatively modest volume of papers is quite revealing of the lack of concensus on the ideal approach. The main contributions of these studies are summarized in Table 2. A few clear trends appear.

In general, researchers focus on panels of ports cost or production performance to make the most of the information available. Only two papers rely on a simple cross-section. Roll and Hayuth (1993) rely on data commonly available from annual reports in ports and Tongzon (2001) covers 16 ports for which he obtained comparable data for 1996.

Second, the models preferences are evenly distributed between stochastic frontiers and DEA, with one study by Bafios, Coto and Rodriguez (1999) also testing a distance function to show the difficulty faced by ports in adjusting in the short run its quasi fix factors. Liu (1995) focuses on production to 5 See Trujillo, L and G. Nombela (2000) for a longer review of port economics.

6For a recent overview of the literature see Campos, Estache and Trujillo (2001); "Information, Accounting and Regulation for Argentina's railways", WBI, mimeo; For a more rigorous survey see, Coelli, T., D.S..P. Rao and G.E. Battese or CRB (1998). For a survey targeted to infrastructure regulators, see Coelli, Estache, Perelman and Trujillo (2000). 7It includes papers by Neufville and Tsunokawa (1981), Suykens (, Kim and Sachis (1986) providing simple productivity assessments. The role of investment has been studied by Shneerson (1981) and planning by Bobrovitch (1982), Sheerson (1983) or Goodman (1984).