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

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  • 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.
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  • 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. Dertinger, Andrea & Hirth, Lion, 2019. "Reforming the Electric Power Industry in Developing Economies," EconStor Preprints 201842, ZBW - Leibniz Information Centre for Economics.
    2. Cummins, Mark & Gillanders, Robert, 2020. "Greasing the Turbines? Corruption and access to electricity in Africa," Energy Policy, Elsevier, vol. 137(C).
    3. Imam, M. & Jamasb, T. & Llorca, M., 2019. "Political Economy of Reform and Regulation in the Electricity Sector of Sub-Saharan Africa," Cambridge Working Papers in Economics 1949, Faculty of Economics, University of Cambridge.
    4. Kenny Baumli & Tooraj Jamasb, 2020. "Assessing Private Investment in African Renewable Energy Infrastructure: A Multi-Criteria Decision Analysis Approach," Sustainability, MDPI, Open Access Journal, vol. 12(22), pages 1-19, November.
    5. 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).
    6. 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).
    7. Asantewaa, Adwoa & Jamasb, Tooraj & Llorca, Manuel, 2020. "Electricity Sector Reform Performance in Sub-Saharan Africa: A Parametric Distance Function Approach," Working Papers 14-2020, Copenhagen Business School, Department of Economics.
    8. 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.
    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.

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    More about this item

    Keywords

    electricity sector reform; corruption; Sub-Saharan Africa; panel data; dynamic GMM;
    All these keywords.

    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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