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Electricity Reforms in Mali: A Macro–Micro Analysis of the Effects on Poverty and Distribution

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Author Info

  • Dorothée Boccanfuso

    ()
    (GREDI, Faculte d'administration, Université de Sherbrooke)

  • Antonio Estache

    ()
    (World Bank and, the European Centre for Advanced Research in Economics and Statistics at the Free University of Brussels)

  • Luc Savard

    ()
    (GREDI, Faculte d'administration, Université de Sherbrooke)

Abstract

This paper uses a computable general equilibrium (CGE) microsimulation model to explore the distributional and poverty-related effects of price reform in the electricity sector of Mali, a poor country in West Africa. In the first part of the paper we analyze the distribution of electricity in Mali by income deciles, showing that few poor households are connected to the electricity grid. We then apply a sequential CGE microsimulation model to track the transmission mechanisms between increases in electricity prices and changes in poverty and inequality among different household groups. Our results show that direct price increases have a minimal effect on poverty and inequality, whereas the general equilibrium effects of such increases are quite strong and negative. The compensating policies we tested do not help those who lose from the pricing reform. In fact they amplify the negative effects

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File URL: http://gredi.recherche.usherbrooke.ca/wpapers/GREDI-0710.pdf
File Function: First version, 2007
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Bibliographic Info

Paper provided by Departement d'Economique de la Faculte d'administration à l'Universite de Sherbrooke in its series Cahiers de recherche with number 07-10.

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Length: 23 pages
Date of creation: 2007
Date of revision:
Handle: RePEc:shr:wpaper:07-10

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Keywords: computable general equilibrium model; micro-simulation; poverty analysis; income distribution; privatization; water utilities;

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References

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  1. Bernard Decaluwé & Yazid Dissou & André Patry, 2001. "Union douanière au sein de l'UEMOA. Une analyse quantitative," Revue économique, Presses de Sciences-Po, vol. 52(4), pages 811-830.
  2. Andersen, Lykke Eg & Faris, Robert, 2002. "Natural Gas and Income Distribution in Bolivia," Documentos de trabajo 1/2002, Instituto de Investigaciones Socio-Económicas (IISEC), Universidad Católica Boliviana.
  3. Shaohua Chen & Martin Ravallion, 2004. "Welfare Impacts of China's Accession to the World Trade Organization," World Bank Economic Review, World Bank Group, vol. 18(1), pages 29-57.
  4. John Cockburn, 2004. "Trade Liberalisation and Poverty in Nepal A Computable General Equilibrium Micro Simulation Analysis," Development and Comp Systems 0409012, EconWPA.
  5. François Bourguignon & Amedeo Spadaro, 2006. "Microsimulation as a tool for evaluating redistribution policies," Journal of Economic Inequality, Springer, vol. 4(1), pages 77-106, April.
  6. Rutherford, Thomas & Tarr, David & Shepotylo, Oleksandr, 2005. "Poverty effects of Russia's WTO accession : modeling"real"households and endogenous productivity effects," Policy Research Working Paper Series 3473, The World Bank.
  7. Shoven,John B. & Whalley,John, 1992. "Applying General Equilibrium," Cambridge Books, Cambridge University Press, number 9780521319867, October.
  8. Thomas W. Hertel & Jeffrey J. Reimer, 2006. "Predicting the Poverty Impacts of Trade Reform," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 2, May.
  9. Luc Savard, 2004. "Poverty and Inequality Analysis within a CGE Framework: a Comparative Analysis of the Representative Agent and Micro-Simulation Approaches," Cahiers de recherche 0412, CIRPEE.
  10. Antonio Estache & O. Chisari & C. Romero, 1999. "Winners and Losers from the Privatization and Regulation of Utilities: Lessons from a General Equilibrium Model of Argentina," ULB Institutional Repository 2013/44005, ULB -- Universite Libre de Bruxelles.
  11. François Bourguignon & Anne-Sophie Robilliard & Sherman Robinson, 2003. "Representative versus real households in the macro-economic modeling of inequality," DELTA Working Papers 2003-05, DELTA (Ecole normale supérieure).
  12. Decaluwe, B. & Patry, A. & Savard, L. & Thorbecke, E., 1999. "Poverty Analysis Within a General Equilibrium Framework," Cahiers de recherche 9909, Université Laval - Département d'économique.
  13. Benitez, Daniel A. & Chisari, Omar O. & Estache, Antonio, 2001. "Can the Gains from Argentina's Utilities Reform Offset Credit Shocks?," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  14. Antonio Estache, 2005. "On Latin America's Infrastructure Experience: Policy Gaps and the Poors," ULB Institutional Repository 2013/44065, ULB -- Universite Libre de Bruxelles.
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Cited by:
  1. Dorothée Boccanfuso & Antonio Estache & Luc Savard, 2007. "Electricity Reforms in Senegal: A Macro–Micro Analysis of the Effects on Poverty and Distribution," Cahiers de recherche 07-12, Departement d'Economique de la Faculte d'administration à l'Universite de Sherbrooke.
  2. Briceno-Garmendia, Cecilia & Shkaratan, Maria, 2011. "Power tariffs : caught between cost recovery and affordability," Policy Research Working Paper Series 5904, The World Bank.
  3. Verikios, George & Zhang, Xiao-guang, 2013. "Structural change in the Australian electricity industry during the 1990s and the effect on household income distribution: A macro–micro approach," Economic Modelling, Elsevier, vol. 32(C), pages 564-575.

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