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Sector Reforms and Institutional Corruption: Evidence from Electricity Industry in Sub-Saharan Africa

Author

Listed:
  • Mahmud I. Imam

    (Durham University Business School, Durham University)

  • Tooraj Jamasb

    (Durham University Business School, Durham University)

  • Manuel Llorca

    (Durham University Business School, Durham University)

Abstract

In order to reduce the influence of corruption on electricity sector performance, most Sub-Saharan African countries have implemented electricity sector reforms. However, after nearly two and half decades of reforms, there is no evidence whether the reforms have mitigated corruption. Neither is there evidence of performance improvement of the reforms in terms of technical, economic or welfare impact. This paper aims to fill this gap. We use a dynamic panel estimator with a novel panel data of 47 Sub-Saharan African countries from 2002 to 2013. We analyse the impact of corruption and two key aspects of electricity reforms – creations of independent regulatory agencies and private sector participation – on three key performance indicators: technical efficiency, access to electricity and income. We find that corruption can significantly reduce technical efficiency of the sector and constrain the efforts to increase access to electricity and national income. The adverse effects are reduced where independent regulatory agencies are established and privatisation is implemented. These findings suggest that well-designed reforms not only boost the performance of the sector directly, but also indirectly reduce the negative effects of macro level institutional deficiencies such as corruption on micro and macro performance indicators.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Mahmud I. Imam & Tooraj Jamasb & Manuel Llorca, 2018. "Sector Reforms and Institutional Corruption: Evidence from Electricity Industry in Sub-Saharan Africa," Working Papers EPRG 1801, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    • Handle: RePEc:enp:wpaper:eprg1801
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    Cited by:

    1. Mustafa Kadir DOĞAN & Funda ALTUN, 2024. "Impact of Corruption on Utility Prices: A Theoretical and Empirical Analysis for the Electricity Markets," Sosyoekonomi Journal, Sosyoekonomi Society, issue 32(60).
    2. Thierry Mamadou Asngar, 2022. "Does financial development improve access to electricity in sub-Saharan Africa?," SN Business & Economics, Springer, vol. 2(9), pages 1-18, September.
    3. Andile Dube & Sylvester Senyo Horvey, 2023. "Institutional quality and renewable energy capital flows in Africa," Future Business Journal, Springer, vol. 9(1), pages 1-16, December.
    4. Lisa Bagnoli & Salvador Bertomeu-Sanchez & Antonio Estache & Maria Vagliasindi, 2023. "Does the ownership of utilities matter for social outcomes? A survey of the evidence for developing countries," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 26(1), pages 24-43, January.
    5. Ma, Juan & Njangang, Henri, 2025. "The effect of gender inequality in internet access on energy poverty: A preliminary investigation in developing countries," Telecommunications Policy, Elsevier, vol. 49(6).
    6. Malah-Kuete, Yselle & Messie-Pondie, Thierry, 2025. "Transparency in energy-rich developing countries: A solution for energy poverty?," Energy Policy, Elsevier, vol. 198(C).
    7. Canh Phuc Nguyen & Nadia Doytch & Christophe Schinckus & Thanh Dinh Su, 2024. "Mobile and internet usage, institutions and the trade balance: Evidence from African countries," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 29(2), pages 2230-2264, April.
    8. Adwoa Asantewaa & Tooraj Jamasb & Manuel Llorca, 2022. "Electricity Sector Reform Performance in Sub-Saharan Africa: A Parametric Distance Function Approach," Energies, MDPI, vol. 15(6), pages 1-29, March.
    9. Williams S. Ebhota, 2021. "Leveraging on Sustainable Energy Transition to Change the Energy Narrative of the Dark Continent," International Journal of Energy Economics and Policy, Econjournals, vol. 11(3), pages 409-416.
    10. Ongo Nkoa, Bruno Emmanuel & Tadadjeu, Sosson & Njangang, Henri, 2023. "Rich in the dark: Natural resources and energy poverty in Sub-Saharan Africa," Resources Policy, Elsevier, vol. 80(C).
    11. Dertinger, Andrea & Hirth, Lion, 2019. "Reforming the Electric Power Industry in Developing Economies," EconStor Preprints 201842, ZBW - Leibniz Information Centre for Economics.
    12. Arowolo, Wale & Perez, Yannick, 2020. "Market reform in the Nigeria power sector: A review of the issues and potential solutions," Energy Policy, Elsevier, vol. 144(C).
    13. Dertinger, Andrea & Hirth, Lion, 2020. "Reforming the electric power industry in developing economies evidence on efficiency and electricity access outcomes," Energy Policy, Elsevier, vol. 139(C).
    14. Kenny Baumli & Tooraj Jamasb, 2020. "Assessing Private Investment in African Renewable Energy Infrastructure: A Multi-Criteria Decision Analysis Approach," Sustainability, MDPI, vol. 12(22), pages 1-19, November.
    15. Nsabimana, René & Perelman, Sergio & Walheer, Barnabé & Mapapa, Mbangala, 2024. "Effectiveness and efficiency in access to reliable electricity: The case of East African countries," Socio-Economic Planning Sciences, Elsevier, vol. 93(C).
    16. Cummins, Mark & Gillanders, Robert, 2020. "Greasing the Turbines? Corruption and access to electricity in Africa," Energy Policy, Elsevier, vol. 137(C).
    17. Azreen Benazir Abdullah Ahmed & Sakib Amin & Charles Harvie & Rabindra Nepal, 2021. "The Nexus Between Energy and Trade in South Asia: A Panel Analysis," Economic Papers, The Economic Society of Australia, vol. 40(2), pages 134-151, June.
    18. Ndoya, Hermann & Kamguia, Brice & Nchofoung, Tii N., 2024. "Can the constitutional concentration of power be linked to Africa's energy poverty?," Energy Policy, Elsevier, vol. 194(C).
    19. Amin, Sakib & Jamasb, Tooraj & Nepal, Rabindra, 2021. "Regulatory reform and the relative efficacy of government versus private investment on energy consumption in South Asia," Economic Analysis and Policy, Elsevier, vol. 69(C), pages 421-433.
    20. Brice Kamguia & Ronald Djeunankan & Sosson Tadadjeu & Henri Njangang, 2024. "Does macroeconomic instability hamper access to electricity? Evidence from developing countries," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 32(2), pages 387-414, April.
    21. Khan, Mushtaq & Watkins, Mitchell & Zahan, Iffat, 2022. "De-risking private power in Bangladesh: How financing design can stop collusive contracting," Energy Policy, Elsevier, vol. 168(C).
    22. Lin, Boqiang & Sai, Rockson, 2022. "Towards low carbon economy: Performance of electricity generation and emission reduction potential in Africa," Energy, Elsevier, vol. 251(C).
    23. Mahmud I Imam & Tooraj Jamasb & Manuel Llorca, 2019. "Political Economy of Reform and Regulation in the Electricity Sector of Sub-Saharan Africa," Working Papers EPRG1917, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    24. Kogueda, Franky BA & Bassongui, Nassibou & Bendoma, Marius, 2025. "Do independent regulatory authorities impact electricity supply in Sub-Saharan Africa?," Utilities Policy, Elsevier, vol. 94(C).
    25. Twesigye, Peter, 2022. "Structural, governance, & regulatory incentives for improved utility performance: A comparative analysis of electric utilities in Tanzania, Kenya, and Uganda," Utilities Policy, Elsevier, vol. 79(C).

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    Keywords

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    JEL classification:

    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption

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