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In the wake of the fraud conspiracy convictions of its former executives Kenneth Lay and Jeffrey Skilling, the name Enron will likely long be synonymous with corporate corruption. But how did it rise, to the point of being the sixth highest-value US orporation, before its precipitous 2001 fall? This case provides a glimpse of a key element of Enron in action, as well as illuminating the complex process of foreign direct investment in a developing economy. The case focuses specifically on the Enron Development Corporation, that arm of the complex web of Enron subsidiaries which sought to build and operate power facilities around the world, including Argentina, Guatemala, the Philippines, Colombia and China. HKS Case Number 1618.1

In the summer of 1993, Australia's Trade Practices Commission was considering whether or not to permanently enjoin Santos Limited from acquiring SAGASCO Holdings Limited. This merger was potentially of enormous significance, since Santos was the largest and SAGASCO the third largest on-shore natural gas producer in Australia. SAGASCO, which was fighting the takeover, argued that the merger would significantly reduce competition in the natural gas market. Santos countered that the gas industry was highly concentrated already and had always been disciplined by competition from other fuels. This case is primarily intended to illustrate the analysis of the competitive effects of a merger, but it can also be used to discuss the relationship between competition policy and the regulation of natural monopolies. HKS Case Number 1484.0

In 1995, the President of Chile proposed to the legislature several reforms designed to strengthen the agency that regulated the tariffs charged by Chile's water companies. Although a half dozen water companies were private, most of the water systems were still in public hands. The government wanted to reform the regulatory agency before it privatized the rest of the companies. HKS Case Number 1448.0

This case describes the first four years of John Swift's tenure as Britain's Rail Regulator and the issues he faced in the fall of 1997. The post of Rail Regulator had been created by the Railway Act of 1993, as part of a plan to break up and privatize the national railway, British Rail, into approximately 70 companies; these included one infrastructure company, 25 passenger train operating companies (TOCs), seven freight TOCs, and over a dozen rolling stock and maintenance companies. The Regulator's primary job was to review the access charges and agreements between the monopoly infrastructure company, Railtrack, and the TOCs. In the fall of 1997, the Regulator was trying to get Railtrack to live up to some investment promises that it had made during its first access charge review and was preparing for the next access charge review. In addition, the Labor Party had won control of Parliament in the May 1997 elections, ending 18 consecutive years of Conservative Party rule, and the Regulator was trying to establish a working relationship with the new Labor government. The case is intended to support a discussion of the analytical challenges and political pressures facing a regulator of a newly privatized industry. The instructor may focus the class discussion on the difficulties that the regulator faces in determining the appropriate access charges, including strategies for gathering the information he needs. Alternatively, the instructor can focus on the extent to which the regulator is insulated from politics in practice, and what his political strategy should be. HKS Case Number 1533.3

In this case, the president of Bolivia and a team of officials grapple with questions of how to set up a model for privatizing a number of state-owned enterprises. In the 1980s, Bolivia, like most other Latin American countries, embraced a more market-oriented development strategy that required the state to intervene less in the economy and to focus more on the essential tasks of government. In the case, privatization is high on the leadership's policy agenda in large part because it is the "unfinished business" of the neo-liberal economic reform program that was first adopted in 1985. In addition, the president has a number of specific goals he wishes to achieve through the process of privatization, such as eliminating a large source of public sector corruption and responding to problems of poverty and inequity in the country. HKS Case Number 1447.0

This microeconomics case examines the pricing issues related to the sale of inexpensive vaccines for use in developing countries. The case describe the historic success of the United Nations' so-called "tiered pricing" policy. This policy had allowed the World Health Organization to purchase large volumes of vaccines at the marginal price of vaccine production-often just a few cents per dose-while developed nations paid the full average cost-often many times more. Changing political circumstances and the cost structure of new vaccines threaten the decades-old arrangement, however. HKS Case Number 1450.0

This case recounts the work of a special Argentina-Uruguay bi-national commission convened to examine the economics of a proposed bridge that would link the two countries. The bridge being considered by commission officials in the spring of 1996 was to extend 41 kilometers across the River Plata estuary, from Buenos Aires to the Uruguay city of Colonias. It would be by far the longest in the world. The case recreates the problem as faced by the commission, which had to consider whether it would make financial sense for a private concessionaire to build and operate the bridge. Specifically, bridge commission staff had to critique the work and recommendations of a private consulting firm whose market projects led it to conclude that tha US$1 billion bridge could successfully be financed by tolls of US$60 per car. HKS Case Number 1400.1

In 1996, Sri Lanka had a mixed public and private bus system, with about one-third of passengers carried by public companies and two-thirds by private. The private buses were not earning enough from passenger fees to replace their buses and as a result there were many complaints of overcrowding and safety problems. The public buses were making do largely because they received free buses from the government. Improving bus service was critical for the country since approximately 80 percent of motorized passenger trips are carried by buses. The government was considering a variety of reforms including fare increases and consolidation of small public and private operators. This case can be used to discuss the politics and rationale for regulation and privatization. And the case describes a 90 year history privatizing, nationalizing, and re-privatizing the bus industry. HKS Case Number 1377.0.

This transport privatization case describes the political complications that can accompany a privately-funded infrastructure project. The case tells the story of a Japanese construction firm and its relationship with the government of Thailand. The firm, Kumagai Gumi, is invited to build US$1 billion, 20-kilometer expressway in Bangkok, and to operate it as a toll road, under a 30-year concession contract. But a 1995 contract dispute prompts the Thai government to force Kumagai Gum first to open the road but then to sell it to Thai investors. The case allows for discussion of both a technical and political nature, focusing on the details of the contracting arrangement but also raising the question of domestic political dimensions in public projects involving non-domestic private investors. HKS Case Number 1401.0

In 1996, Sri Lanka had a mixed public and private bus system, with about one-third of passengers carried by public companies and two-thirds by private. The private buses were not earning enough from passenger fees to replace their buses and as a result there were many complaints of overcrowding and safety problems. The public buses were making do largely because they received free buses from the government. Improving bus service was critical for the country since approximately 80 percent of motorized passenger trips are carried by buses. The government was considering a variety of reforms including fare increases and consolidation of small public and private operators. This case can be used to discuss the politics and rationale for regulation and privatization. And the case describes a 90 year history of privatizing, nationalizing, and re-privatizing the bus industry. HKS Case Number 1378.0.

This case recounts the work of a special Argentina-Uruguay bi-national commission convened to examine the economics of a proposed bridge that would link the two countries. The bridge being considered by commission officials in the spring of 1996 was to extend 41 kilometers across the River Plata estuary, from Buenos Aires to the Uruguay city of Colonias. It would be by far the longest in the world. The case recreates the problem as faced by the commission, which had to consider whether it would make financial sense for a private concessionaire to build and operate the bridge. Specifically, bridge commission staff had to critique the work and recommendations of a private consulting firm whose market projects led it to conclude that the US$1 billion bridge could successfully be financed by tolls of US$60 per car. HKS Case Number 1400.0

In 1993 the municipally owned utility serving Gainesville, Florida was threatening to build a 23-mile rail spur to connect its coal-fired power plant with the tracks of the Norfolk/Southern Railway. The railroad currently delivering the coal, CSXT, had announced a large rate increase to take effect at the end of its current five-year contract and had refused to allow Norfolk/Southern Railway, which was offering a lower rate, to use CSXT tracks to deliver coal to the plant. CSXT had responded to the utility's threat to build the spur by reducing its proposed rate increase and the utility now had to decide whether it should proceed with the spur or accept the new CSXT offer. This case may be used to discuss barriers to entry, market power, and appropriate public policy responses. HKS Case Number 1299.0

An antiquated airport jeopardizes a region's economic health but the county of Albany, New York, operator of the airport, lacks funds to undertake much-needed capital improvements. In this context, the county executive seriously examines privatization-selling the airport off to a private developer with a background in airport management. This case is designed to permit a full discussion of the potential merits and drawbacks of privatization of such a large public facility. It raises such issues as monopoly power and ease of access to capital. The decision to permit the Albany privatization is ultimately made by the Federal Aviation Administration, thus allowing the case to raise national as well as local issues. HKS Case Number 1024.1

An antiquated airport jeopardizes a region's economic health but the county of Albany, New York, operator of the airport, lacks funds to undertake much-needed capital improvements. In this context, the county executive seriously examines privatization-selling the airport off to a private developer with a background in airport management. This case is designed to permit a full discussion of the potential merits and drawbacks of privatization of such a large public facility. It raises such issues as monopoly power and ease of access to capital. The decision to permit the Albany privatization is ultimately made by the Federal Aviation Administration, thus allowing the case to raise national as well as local issues. HKS Case Number 1024.0

Early in 1989, prosecutors in Florida charged a woman with child abuse after she gave birth to her second baby born with signs of cocaine dependency. This case briefly summarizes the problem of cocaine use, the effects of prenatal exposure, and the legal issues surrounding the Florida prosecution. The case can be used to raise a variety of issues, such as the frequency with which disputes about policy are often thinly disguised, disputes about objectives and basic values, and the circumstances under which the state is justified in coercing the behavior of individuals. HKS Case Number 944.0

In April 1983, the City and County of San Francisco and two irrigation districts in Merced and Stanislaus counties commissioned a feasibility study of their long-standing proposal to dam the Tuolumne River for power and water. At the same time, a coalition of environmentalists, rafters, fishing enthusiasts and California residents known as the Tuolumne River Preservation Trust was lobbying Congress to protect the river from further development under the federal Wild and Scenic Rivers Act. The dam proponents had already produced several favorable cost-benefit studies of their proposal; in June 1983, the Trust asked economists at the Environmental Defense Fund to respond to those studies with an economic assessment of the proposed dam's environmental costs.This case is intended to provoke a discussion of how to place an economic value on environmental benefits that are seemingly intangible. The case calls particular attention to the measurement of user benefits, and the special problem of calculating the value placed by non-users on the sheer existence of an environmental asset ("existence value") and the option to use it someday ("option value"). Also relevant is the problem of discounting over the life of a long-term project. HKS Case Number 701.0.

In April 1983, the City and County of San Francisco and two irrigation districts in Merced and Stanislaus counties commissioned a feasibility study of their long-standing proposal to dam the Tuolumne River for power and water. At the same time, a coalition of environmentalists, rafters, fishing enthusiasts and California residents known as the Tuolumne River Preservation Trust was lobbying Congress to protect the river from further development under the federal Wild and Scenic Rivers Act. The dam proponents had already produced several favorable cost-benefit studies of their proposal; in June 1983, the Trust asked economists at the Environmental Defense Fund to respond to those studies with an economic assessment of the proposed dam's environmental costs.This case is intended to provoke a discussion of how to place an economic value on environmental benefits that are seemingly intangible. The case calls particular attention to the measurement of user benefits, and the special problem of calculating the value placed by non-users on the sheer existence of an environmental asset ("existence value") and the option to use it someday ("option value"). Also relevant is the problem of discounting over the life of a long-term project. HKS Case Number 701.1.

The ability of commercial airlines to fly their planes means little without a space in which to land them. In some congested US airports, the times and spots for landing are known as "landing slots" and have been assigned to airlines at the nation's four busiest airports since 1969. For the first decade of this slot system, assignments were made with little controversy by the airline industry committee. Airline deregulation, however, increased demand for slots in the 1980s and vastly increased pressure on the committees apportioning the slots. An idea emerged to resolve competing demands: the FAA could create a market for landing slots and allow demand to set the price and ration the resource. This case tells the story of Secretary of Transportation Elizabeth Dole's deliberations over whether to create a landing slot market. It describes options ranging from auction to "grandfathering," allowing airlines that had based investment decisions on a stockpile of slots to avoid corporate disruption. The case raises issues concerning the appropriateness of a market for allocating resources where concerns other than sheer efficiency are important. It illustrates, too, the difficulties in designing a policy that will allow for transition from one system to another. It has been used in an intermediate microeconomics curriculum to illustrate market operations issues. This is the epilogue to case HKS818. HKS Case Number 781.1.

The ability of commercial airlines to fly their planes means little without a space in which to land them. In some congested US airports, the times and spots for landing are known as "landing slots" and have been assigned to airlines at the nation's four busiest airports since 1969. For the first decade of this slot system, assignments were made with little controversy by the airline industry committee. Airline deregulation, however, increased demand for slots in the 1980s and vastly increased pressure on the committees apportioning the slots. An idea emerged to resolve competing demands: the FAA could create a market for landing slots and allow demand to set the price and ration the resource. This case tells the story of Secretary of Transportation Elizabeth Dole's deliberations over whether to create a landing slot market. It describes options ranging from auction to "grandfathering," allowing airlines that had based investment decisions on a stockpile of slots to avoid corporate disruption. The case raises issues concerning the appropriateness of a market for allocating resources where concerns other than sheer efficiency are important. It illustrates, too, the difficulties in designing a policy that will allow for transition from one system to another. It has been used in an intermediate microeconomics curriculum to illustrate market operations issues. There is an epilogue for this case. HKS Case Number 781.0.

This case is designed to support a discussion of how to apply an economic evaluation of the appropriate level of control of an externality to a real problem with incomplete information of uncertain quality and high political stakes. It sketches the Reagan administration's stance on the issue, explains how regional interests have divided Congress on the desirability of acid rain control legislation, and presents the essential details of a House bill widely felt to have some credibility and political potential. Congressional estimates of the costs of attaining the several different levels of acid rain control possible under the House bill, by several different control methods, are presented and compared to administration estimates of the cost of acid rain damage to agriculture, forests, materials, and lakes. HKS Case Number 699.0