Electricity sector reform in developing countries: an econometric assessment of the effects of privatization, competition and regulation
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 in donor aid programmes, notably 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 51 developing countries, over the period 1985 to 2000. The study identifies the impact of these reforms on generating capacity, electricity generated, labour productivity in the generating sector, capacity utilisation and industrial and residential user prices. The paper concludes that competition appears to bring about favourable results for service penetration, capacity expansion, labour efficiency and prices to industrial users. The effect of privatisation and having an independent regulator, separately, is statistically insignificant except in the case of capacity utilisation and privatisation; while the co-existence of these two reforms does seem to be correlated with greater electricity availability, more generation capacity and higher labour productivity. The main policy conclusions are that on their own privatisation and regulation do not lead to obvious gains in economic performance. When privatising electricity under conditions of monopoly, emphasis should be placed on implementing an effective regulatory framework. By contrast, introducing competition does seem to be effective in stimulating performance improvements, irrespective of changes in ownership or regulation.
(This abstract was borrowed from another version of this item.)
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 33 (2008)
Issue (Month): 2 (April)
|Contact details of provider:|| Web page: http://www.springer.com|
|Order Information:||Web: http://www.springer.com/economics/industrial+organization/journal/11149/PS2|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Chisari, Omar & Estache, Antonio & Romero, Carlos, 1997.
"Winners and losers from utility privatization in Argentina : lessons from a general equilibrium model,"
Policy Research Working Paper Series
1824, The World Bank.
- Chisari, Omar & Estache, Antonio & Romero, Carlos, 1999. "Winners and Losers from Utility Privatization in Argentina. Lessons from a General Equilibrium Model," UADE Working Papers 3_1999, Instituto de Economía, Universidad Argentina de la Empresa.
- David S Saal & David Parker, 2000. "The impact of privatization and regulation on the water and sewerage industry in England and Wales: a translog cost function model," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 21(6), pages 253-268.
- Guasch, J. Luis & Hahn, Robert W., 1997.
"The costs and benefits of regulation : implications for developing countries,"
Policy Research Working Paper Series
1773, The World Bank.
- Guasch, J Luis & Hahn, Robert W, 1999. "The Costs and Benefits of Regulation: Implications for Developing Countries," World Bank Research Observer, World Bank Group, vol. 14(1), pages 137-158, February.
- Villalonga, Belen, 2000. "Privatization and efficiency: differentiating ownership effects from political, organizational, and dynamic effects," Journal of Economic Behavior & Organization, Elsevier, vol. 42(1), pages 43-74, May.
- Hardman Moore, John & Hart, Oliver, 1985.
"Incomplete Contracts and Renegotiation,"
CEPR Discussion Papers
60, C.E.P.R. Discussion Papers.
- Jeffry M. Netter & William L. Megginson, 2001. "From State to Market: A Survey of Empirical Studies on Privatization," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 321-389, June.
- Ehrlich, Isaac & Georges Gallais-Hamonno & Zhiqiang Liu & Randall Lutter, 1994. "Productivity Growth and Firm Ownership: An Analytical and Empirical Investigation," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 1006-1038, October.
- Reiner Martin & Isabel Vansteenkiste, 2001. "EU telecommunications and electricity markets—Heading towards price convergence?," Intereconomics: Review of European Economic Policy, Springer;German National Library of Economics;Centre for European Policy Studies (CEPS), vol. 36(3), pages 131-140, May.
- Lee, Jeong-Dong & Park, Sung-Bae & Kim, Tai-Yoo, 1999. "Profit, productivity, and price differential: an international performance comparison of the natural gas transportation industry," Energy Policy, Elsevier, vol. 27(11), pages 679-689, October.
- John Cubbin & Jon Stern, 2006. "The Impact of Regulatory Governance and Privatization on Electricity Industry Generation Capacity in Developing Economies," World Bank Economic Review, World Bank Group, vol. 20(1), pages 115-141.
- D. Parker, 2002. "Economic Regulation: a review of issues," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 73(4), pages 493-519, December.
- V. Bhaskar & Mushtaq Khan Author-Workplace-Sidney Sussex College, 1994.
"Privatization And Employment: A Study Of The Jute Industry In Bangladesh,"
03, Centre for Development Economics, Delhi School of Economics.
- Bhaskar, V & Khan, Mushtaq, 1995. "Privatization and Employment: A Study of the Jute Industry in Bangladesh," American Economic Review, American Economic Association, vol. 85(1), pages 267-273, March.
- Preetum Domah & Pollitt, M.G. & Jon Stern, 2002. "Modelling the Costs of Electricity Regulation: Evidence of Human Resource Constraints in Developing Countries," Cambridge Working Papers in Economics 0229, Faculty of Economics, University of Cambridge.
- Spiller, Pablo T, 1996. "Institutions and Commitment," Industrial and Corporate Change, Oxford University Press, vol. 5(2), pages 421-452.
- Paul H. Malatesta & Kathryn L. DeWenter, 2001. "State-Owned and Privately Owned Firms: An Empirical Analysis of Profitability, Leverage, and Labor Intensity," American Economic Review, American Economic Association, vol. 91(1), pages 320-334, March.
- Richard J. Gilbert and David M. Newbery., 1988.
Economics Working Papers
8879, University of California at Berkeley.
- Gilbert, Richard & Newbery, David M G, 1988. "Regulation Games," CEPR Discussion Papers 267, C.E.P.R. Discussion Papers.
- Gilbert, Richard J. & Newbery, David M., 1988. "Regulation Games," Department of Economics, Working Paper Series qt50s6h8c6, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Stern, Jon & Holder, Stuart, 1999. "Regulatory governance: criteria for assessing the performance of regulatory systems: An application to infrastructure industries in the developing countries of Asia," Utilities Policy, Elsevier, vol. 8(1), pages 33-50, March.
- repec:reg:rpubli:120 is not listed on IDEAS
- Gutierrez, Luis H., 2003.
"Regulatory governance in the Latin American telecommunications sector,"
Elsevier, vol. 11(4), pages 225-240, December.
- Luis Gutierrez, 2002. "Regulatory governance in the latinamerican telecommunications sector," BORRADORES DE INVESTIGACIÓN 003447, UNIVERSIDAD DEL ROSARIO.
- P. Cook, 1999. "Privatization and Utility Regulation in Developing Countries: the Lessons So Far," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 70(4), pages 549-587, December.
- Wallsten, Scott J, 2001. "An Econometric Analysis of Telecom Competition, Privatization, and Regulation in Africa and Latin America," Journal of Industrial Economics, Wiley Blackwell, vol. 49(1), pages 1-19, March.
- Zhang, Yingang & Parker, David & Kirkpatrick, Colin, 2004.
"Competition, Regulation and Privatisation of Electricity Generation in Developing Countries: Does the Sequencing of the Reforms Matter?,"
Centre on Regulation and Competition (CRC) Working papers
30599, University of Manchester, Institute for Development Policy and Management (IDPM).
- Zhang, Yinfang & Parker, David & Kirkpatrick, Colin, 2005. "Competition, regulation and privatisation of electricity generation in developing countries: does the sequencing of the reforms matter?," The Quarterly Review of Economics and Finance, Elsevier, vol. 45(2-3), pages 358-379, May.
- Witold Jerzy Henisz, 2004. "Political Institutions and Policy Volatility," Economics and Politics, Wiley Blackwell, vol. 16(1), pages 1-27, 03.
- Gutierrez, Luis H. & Berg, Sanford, 2000. "Telecommunications liberalization and regulatory governance: lessons from Latin America," Telecommunications Policy, Elsevier, vol. 24(10-11), pages 865-884, November.
- Ada Karina Izaguirre, 1998. "Private Participation in the Electricity Sector : Recent Trends," World Bank Other Operational Studies 11532, The World Bank.
- Jamasb, T. & Pollitt, M., 2001. "Benchmarking and Regulation of Electricity Transmission and Distribution Utilities: Lessons from International Experience," Cambridge Working Papers in Economics 0101, Faculty of Economics, University of Cambridge.
- Faye Steiner, 2000. "Regulation, Industry Structure and Performance in the Electricity Supply Industry," OECD Economics Department Working Papers 238, OECD Publishing.
- Schmitz, Patrick W., 2001.
"The Hold-Up Problem and Incomplete Contracts: A Survey of Recent Topics in Contract Theory,"
12562, University Library of Munich, Germany.
- Schmitz, Patrick W, 2001. "The Hold-up Problem and Incomplete Contracts: A Survey of Recent Topics in Contract Theory," Bulletin of Economic Research, Wiley Blackwell, vol. 53(1), pages 1-17, January.
- MÃ¡ximo Torero & Alberto PascÃ³-Font, 2003.
"The social impact of privatization and the regulation of utilities in Peru,"
in: Utility Privatization and Regulation, chapter 11
Edward Elgar Publishing.
- Torero, Maximo & Pasco-Font, Alberto, 2001. "The Social Impact of Privatization and the Regulation of Utilities in Peru," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
- Narjess Boubakri & Jean-Claude Cosset, 1998. "The Financial and Operating Performance of Newly Privatized Firms: Evidence from Developing Countries," Journal of Finance, American Finance Association, vol. 53(3), pages 1081-1110, 06.
- Delfino, Jose A. & Casarin, Ariel A., 2001. "The Reform of the Utilities Sector in Argentina," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
- Mark Armstrong & Simon Cowan & John Vickers, 1994. "Regulatory Reform: Economic Analysis and British Experience," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262510790.
- Arocena, Pablo & Waddams Price, Catherine, 2002. "Generating efficiency: economic and environmental regulation of public and private electricity generators in Spain," International Journal of Industrial Organization, Elsevier, vol. 20(1), pages 41-69, January.
- Andrew N. Kleit & Dek Terrell, 2001. "Measuring Potential Efficiency Gains From Deregulation Of Electricity Generation: A Bayesian Approach," The Review of Economics and Statistics, MIT Press, vol. 83(3), pages 523-530, August.
- Crew, Michael A & Kleindorfer, Paul R, 1996. "Incentive Regulation in the United Kingdom and the United States: Some Lessons," Journal of Regulatory Economics, Springer, vol. 9(3), pages 211-225, May.
- Kirkpatrick, Colin & Parker, David & Zhang, Yin-Fang, 2004. "Foreign Direct Investment in Infrastructure in Developing Countries: Does Regulation Make a Difference?," Centre on Regulation and Competition (CRC) Working papers 30703, University of Manchester, Institute for Development Policy and Management (IDPM).
- Yunos, Jamaluddin Mohd & Hawdon, David, 1997. "The efficiency of the National Electricity Board in Malaysia: An intercountry comparison using DEA," Energy Economics, Elsevier, vol. 19(2), pages 255-269, May.
- Witold J. Henisz & Bennet A. Zelner, 2001. "The Institutional Environment for Telecommunications Investment," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 10(1), pages 123-147, 03.
- Jamasb, T. & Mota, R. & Newbery, D. & Pollitt, M., 2004.
"‘Electricity Sector Reform in Developing Countries: A Survey of Empirical Evidence on Determinants and Performance’,"
Cambridge Working Papers in Economics
0439, Faculty of Economics, University of Cambridge.
- 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 3549, The World Bank.
- David M. Newbery, 2002. "Privatization, Restructuring, and Regulation of Network Utilities," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262640481.
- Saal, David S & Parker, David, 2001. "Productivity and Price Performance in the Privatized Water and Sewerage Companies of England and Wales," Journal of Regulatory Economics, Springer, vol. 20(1), pages 61-90, July.
When requesting a correction, please mention this item's handle: RePEc:kap:regeco:v:33:y:2008:i:2:p:159-178. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)or (Rebekah McClure)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.