IDEAS home Printed from https://ideas.repec.org/a/eco/journ2/2018-01-12.html
   My bibliography  Save this article

Privatization and the Role of Sub-National Governments in the Latin American Power Sector: A Plea for Less Subsidiarity?

Author

Listed:
  • Elkhan Richard Sadik-Zada

    (Institute of Development Research and Development Policy, Ruhr-Universit t Bochum, Germany)

  • Wilhelm L wenstein

    (Institute of Development Research and Development Policy, Ruhr-Universit t Bochum, Germany)

  • Mattia Ferrari

    (Institute of Development Research and Development Policy, Ruhr-Universit t Bochum, Germany)

Abstract

In this paper, we explore the cross-national impact of privatization in the network industries on the access to network services. We focus on the assessment of the electricity sector in 20 Latin American countries and analyze the time series between 1985 and 2010. To control for the relevance of the subsidiarity (social commons) argument (Byrne and Mun, 2001; 2003) we assess the interaction between commodification and the role of the sub-national governments in the power sector. Privatization has a statistically significant positive effect on the level of electricity access. In the absence of federalism, privatization in the electricity sector has a greater impact on electrification than in the case with federalist government system. Federalism has a positive impact on the electricity access if electricity is generated and supplied mainly by the state-owned enterprises. Another interesting finding is the relationship between the degree of subsidiarity and electrification: A higher the degree of subsidiarity has a negative effect on the electrification. This could be a result of the increasing transaction costs and rent-seeking behavior in the decentralized settings. The study complements the existing literature by analyzing the privatization reform from the subsidiarity perspective.

Suggested Citation

  • Elkhan Richard Sadik-Zada & Wilhelm L wenstein & Mattia Ferrari, 2018. "Privatization and the Role of Sub-National Governments in the Latin American Power Sector: A Plea for Less Subsidiarity?," International Journal of Energy Economics and Policy, Econjournals, vol. 8(1), pages 95-103.
    • Handle: RePEc:eco:journ2:2018-01-12
    as

    Download full text from publisher

    File URL: https://www.econjournals.com/index.php/ijeep/article/download/5762/3557
    Download Restriction: no
    File URL: https://www.econjournals.com/index.php/ijeep/article/view/5762/3557
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. repec:idb:brikps:59818 is not listed on IDEAS
    2. K. Arin & Mehmet Ulubaşoğlu, 2009. "Leviathan resists: the endogenous relationship between privatization and firm performance," Public Choice, Springer, vol. 140(1), pages 185-204, July.
    3. Vivien Foster & José Luis Guasch & Luis Andrés & Thomas Haven, 2008. "The Impact of Private Sector Participation in Infrastructure: Lights, Shadows, and the Road Ahead," IDB Publications (Books), Inter-American Development Bank, number 59818, February.
    4. Foster, Vivien & Guasch, José Luis & Andrés, Luis & Haven, Thomas, 2008. "The Impact of Private Sector Participation in Infrastructure: Lights, Shadows, and the Road Ahead," IDB Publications (Books), Inter-American Development Bank, number 358, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Asongu, Simplice A. & Biekpe, Nicholas & Cassimon, Danny, 2020. "Understanding the greater diffusion of mobile money innovations in Africa," Telecommunications Policy, Elsevier, vol. 44(8).
    2. Eduardo Polloni-Silva & Diogo Ferraz & Flávia de Castro Camioto & Daisy Aparecida do Nascimento Rebelatto & Herick Fernando Moralles, 2021. "Environmental Kuznets Curve and the Pollution-Halo/Haven Hypotheses: An Investigation in Brazilian Municipalities," Sustainability, MDPI, vol. 13(8), pages 1-19, April.
    3. D'Adamo, Idiano & Gastaldi, Massimo & Rosa, Paolo, 2020. "Recycling of end-of-life vehicles: Assessing trends and performances in Europe," Technological Forecasting and Social Change, Elsevier, vol. 152(C).
    4. Simplice A. Asongu & Mushfiqur Rahman & Mohammad Alghababsheh, 2022. "Information Technology, Business Sustainability and Female Economic Participation in Sub-Saharan Africa," Working Papers 22/057, European Xtramile Centre of African Studies (EXCAS).
    5. Danielle Denes dos Santos Carstens & Sieglinde Kindl da Cunha, 2018. "Solar Energy Growth in Brazil: Essential Dimensions for the Technological Transition," International Journal of Energy Economics and Policy, Econjournals, vol. 8(4), pages 293-302.
    6. Sadik-Zada, Elkhan Richard & Gatto, Andrea, 2023. "Civic engagement and energy transition in the Nordic-Baltic Sea Region: Parametric and nonparametric inquiries," Socio-Economic Planning Sciences, Elsevier, vol. 87(PA).
    7. Yinuo Wang & Fengxiu Zhou & Huwei Wen, 2023. "Does Environmental Decentralization Promote Renewable Energy Development? A Local Government Competition Perspective," Sustainability, MDPI, vol. 15(14), pages 1-18, July.
    8. Zbysław Dobrowolski, 2021. "Energy and Local Safety: How the Administration Limits Energy Security," Energies, MDPI, vol. 14(16), pages 1-11, August.
    9. Vanessa da Silva Mariotto Onody & Ana Catarina Gandra de Carvalho & Eduardo Polloni-Silva & Guilherme Augusto Roiz & Enzo Barberio Mariano & Daisy Aparecida Nascimento Rebelatto & Herick Fernando Mora, 2022. "Corruption and FDI in Brazil: Contesting the “Sand” or “Grease” Hypotheses," Sustainability, MDPI, vol. 14(10), pages 1-18, May.
    10. Paryono Paryono & Khudzaifah Dimyati & Absori Absori & Shinta Dewi Rismawati, 2019. "The Hegemony of Global Capitalism in the Regulation of Electricity: The Electricity Policies of the Selected Southeast Asian Nations," International Journal of Energy Economics and Policy, Econjournals, vol. 9(6), pages 326-335.
    11. Inga Zicmane & Sergey Kovalenko & Svetlana Beryozkina & Kristina Berzina & Aleksejs Sobolevskis, 2021. "Evaluation of Latvian Power System Static Stability According to a New Development Strategy until 2025," Sustainability, MDPI, vol. 13(12), pages 1-27, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. García-Valiñas, María de los Ángeles & González-Gómez, Francisco & Picazo-Tadeo, Andrés J., 2013. "Is the price of water for residential use related to provider ownership? Empirical evidence from Spain," Utilities Policy, Elsevier, vol. 24(C), pages 59-69.
    2. Antonio Estache & Caroline Philippe, 2012. "The Impact of Private Participation in Infrastructure in Developing Countries: Taking Stock of about 20 Years of Experience," Working Papers ECARES ECARES 2012-043, ULB -- Universite Libre de Bruxelles.
    3. Nicolas Campos & Eduardo Engel & Ronald D. Fischer & Alexander Galetovic, 2019. "Renegotiations and corruption in infrastructure: The Odebrecht case," "Marco Fanno" Working Papers 0230, Dipartimento di Scienze Economiche "Marco Fanno".
    4. Andres, Luis A. & Bahuguna, Aroha, 2020. "Overcoming missing data bias in water utility indicators by using nested balanced panels," Utilities Policy, Elsevier, vol. 67(C).
    5. World Bank, 2008. "Benchmarking Analysis of the Electricity Distribution Sector in the Latin American and Caribbean Region," World Bank Publications - Reports 12675, The World Bank Group.
    6. Antonio Estache & Jose-Luis Guasch & Atsushi Iimi & Lourdes Trujillo, 2009. "Multidimensionality and Renegotiation: Evidence from Transport-Sector Public-Private-Partnership Transactions in Latin America," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 35(1), pages 41-71, September.
    7. Marco Percoco, 2012. "Infrastructure Investment and Growth in Developing Countries: Does the Type of Contract Matter?," Journal of Infrastructure Development, India Development Foundation, vol. 4(2), pages 139-152, December.
    8. Mariana Vijil & Laurent Wagner, 2012. "Does Aid for Trade Enhance Export Performance? Investigating the Infrastructure Channel," The World Economy, Wiley Blackwell, vol. 35(7), pages 838-868, July.
    9. Antonio Estache & Liam Wren-Lewis, 2009. "Toward a Theory of Regulation for Developing Countries: Following Jean-Jacques Laffont's Lead," Journal of Economic Literature, American Economic Association, vol. 47(3), pages 729-770, September.
    10. Fonseca-Mairena, María Haydée & Triossi, Matteo, 2019. "Incentives and implementation in marriage markets with externalities," Economics Letters, Elsevier, vol. 185(C).
    11. Marcelo Selowsky & Claudio Loser, 2015. "Improving Microeconomic Efficiency of Latin American Economies," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 7(2), pages 121-149, May.
    12. Mbuvi, Dorcas & Tarsim, Achraf, 2011. "Managerial ownership and urban water utilities efficiency in Uganda," MERIT Working Papers 2011-036, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    13. Herrera, Veronica & Post, Alison E., 2014. "Can Developing Countries Both Decentralize and Depoliticize Urban Water Services? Evaluating the Legacy of the 1990s Reform Wave," World Development, Elsevier, vol. 64(C), pages 621-641.
    14. Bel, Germà, 2020. "Public versus private water delivery, remunicipalization and water tariffs," Utilities Policy, Elsevier, vol. 62(C).
    15. John Nellis, 2012. "The International Experience with Privatization: Its Rapid Rise, Partial Fall and Uncertain Future," SPP Research Papers, The School of Public Policy, University of Calgary, vol. 5(3), January.
    16. Fabre, Anaïs & Straub, Stéphane, 2019. "The Impact of Public-Private Partnerships (PPPs) in Infrastructure, Health and Education: A Review," TSE Working Papers 19-986, Toulouse School of Economics (TSE), revised Sep 2021.
    17. Herrera Dappe,Matias & Musacchio,Aldo & Pan,Carolina & Semikolenova,Yadviga Viktorivna & Turkgulu,Burak & Barboza,Jonathan, 2022. "Infrastructure State-Owned Enterprises : A Tale of Inefficiency and Fiscal Dependence," Policy Research Working Paper Series 9969, The World Bank.
    18. Matteo Stiglich, 2021. "Unplanning urban transport: Unsolicited urban highways in Lima," Environment and Planning A, , vol. 53(6), pages 1490-1506, September.
    19. Sylvia CESAR, 2019. "Privatization Of Water: Evaluating Its Performance In The Developing World," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 90(1), pages 5-23, March.
    20. Christian Bjørnskov & Niklas Potrafke, 2012. "Political Ideology and Economic Freedom Across Canadian Provinces," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 38(2), pages 143-166.

    More about this item

    Keywords

    Privatization; Federalism; Subsidiarity; Power Sector; Latin America; Commodification;
    All these keywords.

    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • H13 - Public Economics - - Structure and Scope of Government - - - Economics of Eminent Domain; Expropriation; Nationalization
    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eco:journ2:2018-01-12. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ilhan Ozturk (email available below). General contact details of provider: http://www.econjournals.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.