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Power's Promise : Electricity Reforms in Eastern Europe and Central Asia

  • Julian Lampietti
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    This study analyzes the fiscal, efficiency, social, and environmental impact of power sector reforms in seven countries in the ECA region. It finds sector deficits have been falling over the last decade and that the savings from lower sector deficits did not translate into higher social spending. More emphasis must be placed on monitoring deficits and tailoring policy reform to country specific circumstances. The impact of reform on utility efficiency, as measured by the cost of generation, system loss collections, and operational efficiency, is ambiguous. While overall revenue per kilowatt hour increased in almost all countries, problems continue with losses, collection rates, and staffing. In terms of social impacts, electricity spending as a share of income increased, especially for the poor, while consumption stayed the same. In terms of environmental impacts, reforms did slightly improve energy efficiency in power plants though this has little direct impact on human health because the electricity sector's share of the total health damage from air pollution is negligible. Several lessons emerge from the analysis. Undertaking simple ex ante simulations of reform impacts will allow better identification of potential reform benefits and costs. Placing more emphasis on outcome-based indicators of service quality would help ensure that future operations produce the intended end-user benefits. In many cases, tariff increases can and should be explicitly timed to coincide with service quality improvements. Yet, this may not be always possible. Where it is not, the adverse impact of tariff increases, especially for low-income consumers, should be mitigated by improving access to and efficiency in the use of clean alternatives.

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    This book is provided by The World Bank in its series World Bank Publications with number 14936 and published in 2004-06.
    ISBN: 0-8213-5900-2
    Handle: RePEc:wbk:wbpubs:14936
    Contact details of provider: Postal: 1818 H Street, N.W., Washington, DC 20433
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    1. repec:ebd:wpaper:66 is not listed on IDEAS
    2. Komives, Kristin & Whittington, Dale & Wu, Xun, 2001. "Infrastructure coverage and the poor : the global perspective," Policy Research Working Paper Series 2551, The World Bank.
    3. Julian A. Lampietti & Anthony A. Kolb & Sumila Gulyani & Vahram Avenesyan, 2001. "Utility Pricing and the Poor : Lessons from Armenia," World Bank Publications, The World Bank, number 13913.
    4. Aleh Tsyvinski & Martin Petri & Günther Taube, 2002. "Energy Sector Quasi-Fiscal Activities in the Countries of the Former Soviet Union," IMF Working Papers 02/60, International Monetary Fund.
    5. Hope, Einar & Singh, Balbir, 1995. "Energy price increases in developing countries : case studies of Colombia, Ghana, Indonesia, Malaysia, Turkey, and Zimbabwe," Policy Research Working Paper Series 1442, The World Bank.
    6. Shirley, Mary & Walsh, Patrick, 2000. "Public versus private ownership : the current state of the debate," Policy Research Working Paper Series 2420, The World Bank.
    7. Antonio Estache & A. Gomez-Lobo & D. Leipziger, 2001. "Utilities Privatization and the Poor: Lessons and evidence from Latin America," ULB Institutional Repository 2013/43997, ULB -- Universite Libre de Bruxelles.
    8. Freund, Caroline L. & Wallich, Christine I., 1995. "Raising household energy prices in Poland : who gains? who loses?," Policy Research Working Paper Series 1495, The World Bank.
    9. Jeffrey D. Sachs & Andrew M. Warner, 1995. "Natural Resource Abundance and Economic Growth," NBER Working Papers 5398, National Bureau of Economic Research, Inc.
    10. Birdsall, Nancy & Nellis, John, 2003. "Winners and Losers: Assessing the Distributional Impact of Privatization," World Development, Elsevier, vol. 31(10), pages 1617-1633, October.
    11. Sudeshna Ghosh Banerjee & Michael C. Munger, 2004. "Move to markets? An empirical analysis of privatization in developing countries," Journal of International Development, John Wiley & Sons, Ltd., vol. 16(2), pages 213-240.
    12. Lev Freinkman & Gohar Gyulumyan & Artak Kyurumyan, 2003. "Quasi-Fiscal Activities, Hidden Government Subsidies, and Fiscal Adjustment in Armenia," World Bank Publications, The World Bank, number 15074.
    13. Venkataraman Krishnaswamy & Gary Stuggins, 2003. "Private Sector Participation in the Power Sector in Europe and Central Asia : Lessons from the Last Decade," World Bank Publications, The World Bank, number 15123.
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