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Utility regulation in Africa: How relevant is the British model?

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  • Wren-Lewis, Liam

Abstract

This article considers whether African utility regulators can draw useful lessons from the British experience over the past thirty years. We focus on three features that are considered key properties of the British regulatory model: price-cap incentive regulation, independent regulatory agencies and an emphasis on introducing competition where possible. For each property, we ask how relevant the model is for most African countries. Overall, we argue that although the British model probably has some lessons which can help improve utility performance in Africa, the problems that they help to solve are generally second-order. Ultimately, institutional weaknesses are the main root of regulatory failure in many African countries, and these weaknesses call for a model of regulation designed specifically to address them.

Suggested Citation

  • Wren-Lewis, Liam, 2014. "Utility regulation in Africa: How relevant is the British model?," Utilities Policy, Elsevier, vol. 31(C), pages 203-205.
  • Handle: RePEc:eee:juipol:v:31:y:2014:i:c:p:203-205
    DOI: 10.1016/j.jup.2014.09.002
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    References listed on IDEAS

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    1. Pineau, Pierre-Olivier, 2008. "Electricity sector integration in West Africa," Energy Policy, Elsevier, vol. 36(1), pages 210-223, January.
    2. 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.
    3. Wren-Lewis, Liam, 2013. "Commitment in utility regulation: A model of reputation and policy applications," Journal of Economic Behavior & Organization, Elsevier, vol. 89(C), pages 210-231.
    4. Xeni Dassiou & Jon Stern, 2009. "Infrastructure Contracts: Trust and Institutional Updating," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 35(1), pages 171-216, September.
    5. Eberhard, Anton & Gratwick, Katharine Nawaal, 2011. "IPPs in Sub-Saharan Africa: Determinants of success," Energy Policy, Elsevier, vol. 39(9), pages 5541-5549, September.
    6. Antonio Estache & L. Wren-Lewis, 2008. "Towards a Theory of Regulation for Developing Countries: Following Laffont's Lead," Working Papers ECARES 2008_018, ULB -- Universite Libre de Bruxelles.
    7. Philippe Marin, 2009. "Public-Private Partnerships for Urban Water Utilities : A Review of Experiences in Developing Countries," World Bank Publications, The World Bank, number 2703, July.
    8. Antonio Estache & Emili Grifell-Tatj�, 2013. "How (Un)Even was the Distribution of the Impacts of Mali's Water Privatisation across Stakeholders?," Journal of Development Studies, Taylor & Francis Journals, vol. 49(4), pages 483-499, April.
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    Cited by:

    1. Lodge, Martin & Stern, Jon, 2014. "British utility regulation: Consolidation, existential angst, or fiasco?," Utilities Policy, Elsevier, vol. 31(C), pages 146-151.
    2. Jensen, Olivia & Wu, Xun, 2017. "The hybrid model for economic regulation of water utilities: Mission impossible?," Utilities Policy, Elsevier, vol. 48(C), pages 122-131.

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    More about this item

    Keywords

    Incentive regulation; Africa; Electricity sector; Water sector;
    All these keywords.

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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