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Bribes, Bureaucracies and Blackouts: Towards Understanding How Corruption at the Firm Level Impacts Electricity Reliability

Author

Listed:
  • Jacquelyn Pless

    (Division of Economics and Business, Colorado School of Mines)

  • Harrison Fell

    (Division of Economics and Business, Colorado School of Mines)

Abstract

This paper looks at whether bribes for electricity connections affect electricity reliability. Using detailed firm-level data, we estimate various specifications based upon repeated cross-sections and means-based pseudo-panels to show that bribes are closely related to poorer electricity reliability. We find that the propensity to bribe for an electricity connection is associated with an increase of 20 power outages per month and a 28% increase in annual sales lost due to power outages on average. The results parallel a tragedy of the commons story: electricity, which exhibits common-pool resource characteristics, suffers from overexploitation as self-interested individual firms rationally bribe for electricity, creating negative impacts in aggregate on the overall quality of the resource. Given the importance of electricity reliability for economic growth and development, the findings imply that improving oversight and enforcement measures at the consumer level targeting the reduction of bribery for electricity connections could contribute to growth and development.

Suggested Citation

  • Jacquelyn Pless & Harrison Fell, 2015. "Bribes, Bureaucracies and Blackouts: Towards Understanding How Corruption at the Firm Level Impacts Electricity Reliability," Working Papers 2015-10, Colorado School of Mines, Division of Economics and Business.
    • Handle: RePEc:mns:wpaper:wp201510
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    File URL: http://econbus-papers.mines.edu/working-papers/wp201510.pdf
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    Cited by:

    1. Adewuyi, Adeolu & Emmanuel, Zachariah, 2018. "Electricity Outages and Firm Performance Across the Six Geo-Political Zones in Nigeria: The Role of Corruption," MPRA Paper 92089, University Library of Munich, Germany, revised 03 Feb 2019.
    2. Rohan Best & Paul J. Burke, 2017. "The Importance of Government Effectiveness for Transitions toward Greater Electrification in Developing Countries," Energies, MDPI, vol. 10(9), pages 1-17, August.
    3. Zaman, Rafia & Brudermann, Thomas, 2018. "Energy governance in the context of energy service security: A qualitative assessment of the electricity system in Bangladesh," Applied Energy, Elsevier, vol. 223(C), pages 443-456.
    4. Farzan Yahya & Muhammad Rafiq, 2020. "Brownfield, greenfield, and renewable energy consumption: Moderating role of effective governance," Energy & Environment, , vol. 31(3), pages 405-423, May.
    5. Grimley, Matthew & Chan, Gabriel, 2023. "“Cooperative is an oxymoron!”: A polycentric energy transition perspective on distributed energy deployment in the Upper Midwestern United States," Energy Policy, Elsevier, vol. 172(C).
    6. Majid Hashemi & Glenn Jenkins, 2021. "The Economic Benefits of Mitigating the Risk of Unplanned Power Outages," Working Paper 1468, Economics Department, Queen's University.
    7. Adewuyi, Adeolu & Emmanuel, Zachariah, 2018. "Electricity Outages and Firm Performance Across the Six Geo-Political Zones in Nigeria: The Role of Corruption," MPRA Paper 92091, University Library of Munich, Germany, revised 04 Feb 2019.
    8. Hashemi, Majid & Jenkins, Glenn, 2022. "Can privatization of distribution substations improve electricity reliability for non-residential customers? An application to Nepal," Utilities Policy, Elsevier, vol. 74(C).
    9. Islam, Asif & Hyland, Marie, 2019. "The drivers and impacts of water infrastructure reliability – a global analysis of manufacturing firms," Ecological Economics, Elsevier, vol. 163(C), pages 143-157.
    10. Emmanuel, Zachariah & Anga, Rosemary A. & Isa, Charity G., 2019. "The Determinants of Micro, Small and Medium Enterprises’ (MSMEs) Performance in Nigeria: Evidence from Business Enterprise Survey," MPRA Paper 98874, University Library of Munich, Germany.
    11. Paudel, Jayash, 2016. "Community-Managed Forests and Household Welfare: Empirical Evidence from Nepal," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235481, Agricultural and Applied Economics Association.
    12. Gideon Otchere-Appiah & Shingo Takahashi & Mavis Serwaa Yeboah & Yuichiro Yoshida, 2021. "The Impact of Smart Prepaid Metering on Non-Technical Losses in Ghana," Energies, MDPI, vol. 14(7), pages 1-16, March.
    13. Naso, Pedro, 2024. "Delegation of environmental regulation and perceived corruption in South Africa," Resource and Energy Economics, Elsevier, vol. 79.
    14. Shehzadi, Anam, 2023. "Energy efficiency and productivity in emerging and developing Asian countries: A firm level analysis," Journal of Asian Economics, Elsevier, vol. 88(C).

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    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy

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