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Assessing the Effects of Privatisation, Competition and Regulation on Economic Performance : The Case of Electricity Sector Reform

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  • Yin-Fang Zhang

    (SCAPE)

  • David Parker
  • Colin Kirkpatrick

Abstract

Over the last two decades electricity sectors in both developed and developing countries have been subject to restructuring to introduce private capital and increase competition. This has been accompanied by the introduction of new regulatory regimes. Although the effects of such reforms in a number of the developed economies are now well documented, apart from a few case studies the experience of developing countries is much less well researched. This is important because privatisation, competition and the reform of state regulation are key themes of donor aid programmes, notably those of the World Bank. This paper provides an econometric assessment of the effects of privatisation, competition and regulation on the performance of the electricity generation industry using panel data for 36 developing and transitional countries, over the period 1985 to 2003. The study identifies the impact of these reforms on generating capacity, electricity generated, labour productivity in the generating sector and capacity utilisation. The main conclusions are that on their own privatisation and regulation do not lead to obvious gains in economic performance, though there are some positive interaction effects. By contrast, introducing competition does seem to be effective in stimulating performance improvements.

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Bibliographic Info

Paper provided by East Asian Bureau of Economic Research in its series Development Economics Working Papers with number 22589.

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Date of creation: Jan 2005
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Handle: RePEc:eab:develo:22589

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Keywords: Privatisation; competition; regulation; developing economies;

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References

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  8. Jamasb, Tooraj & Mota, Raffaella & Newbery, David & Pollitt, Michael, 2005. "Electricity sector reform in developing countries : a survey of empirical evidence on determinants and performance," Policy Research Working Paper Series, The World Bank 3549, The World Bank.
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  20. Yunos, Jamaluddin Mohd & Hawdon, David, 1997. "The efficiency of the National Electricity Board in Malaysia: An intercountry comparison using DEA," Energy Economics, Elsevier, Elsevier, vol. 19(2), pages 255-269, May.
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  22. Crew, Michael A & Kleindorfer, Paul R, 1996. "Incentive Regulation in the United Kingdom and the United States: Some Lessons," Journal of Regulatory Economics, Springer, Springer, vol. 9(3), pages 211-25, May.
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  24. Jamasb, T. & Pollitt, M., 2001. "Benchmarking and Regulation of Electricity Transmission and Distribution Utilities: Lessons from International Experience," Cambridge Working Papers in Economics, Faculty of Economics, University of Cambridge 0101, Faculty of Economics, University of Cambridge.
  25. Wallsten, Scott J, 2001. "An Econometric Analysis of Telecom Competition, Privatization, and Regulation in Africa and Latin America," Journal of Industrial Economics, Wiley Blackwell, Wiley Blackwell, vol. 49(1), pages 1-19, March.
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