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Utilities reforms and corruption in developing countries

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  • Antonio Estache
  • A. Goicoechea
  • Lourdes Trujillo

Abstract

This paper shows empirically that "privatization" in the energy, telecommunications, and water sectors, and the introduction of independent regulators in those sectors, have not always had the expected effects on access, affordability, or quality of services. It also shows that corruption leads to adjustments in the quantity, quality, and price of services consistent with the profit-maximizing behavior that one would expect from monopolies in the sector. Finally, our results suggest that privatization and the introduction of independent regulators have, at best, only partial effects on the consequences of corruption for access, affordability, and quality of utilities services. © 2008 Elsevier Ltd. All rights reserved.

Suggested Citation

  • Antonio Estache & A. Goicoechea & Lourdes Trujillo, 2008. "Utilities reforms and corruption in developing countries," ULB Institutional Repository 2013/43908, ULB -- Universite Libre de Bruxelles.
  • Handle: RePEc:ulb:ulbeco:2013/43908
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    Cited by:

    1. Berg, Sanford V. & Jiang, Liangliang & Lin, Chen, 2012. "Regulation and corporate corruption: New evidence from the telecom sector," Journal of Comparative Economics, Elsevier, vol. 40(1), pages 22-43.
    2. Roxas, Fernando & Santiago, Andrea, 2010. "Broken dreams: Unmet expectations of investors in the Philippine electricity restructuring and privatization," Energy Policy, Elsevier, vol. 38(11), pages 7269-7277, November.
    3. Imam, M. & Jamasb, T. & Llorca, M. & Llorca, M., 2018. "Power Sector Reform and Corruption: Evidence from Sub-Saharan Africa," Cambridge Working Papers in Economics 1801, Faculty of Economics, University of Cambridge.
    4. Pless, Jacquelyn & Fell, Harrison, 2017. "Bribes, bureaucracies, and blackouts: Towards understanding how corruption at the firm level impacts electricity reliability," Resource and Energy Economics, Elsevier, vol. 47(C), pages 36-55.
    5. Sergio Beraldo & Massimo Bordignon & Simone Pellegrino & Massimiliano Piacenza & Gilberto Turati, 2017. "Fiscally Responsible Mafia-clans," Working papers 043, Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino.
    6. Liam Wren-Lewis, 2015. "Do Infrastructure Reforms Reduce the Effect of Corruption? Theory and Evidence from Latin America and the Caribbean," World Bank Economic Review, World Bank Group, vol. 29(2), pages 353-384.
    7. Emmanuelle Auriol & Stéphane Straub, 2011. "Privatization of Rent-Generating Industries and Corruption," Chapters,in: International Handbook on the Economics of Corruption, Volume Two, chapter 7 Edward Elgar Publishing.
    8. Kenny, Charles, 2006. "Measuring and reducing the impact of corruption in infrastructure," Policy Research Working Paper Series 4099, The World Bank.
    9. Rohan Best & Paul J. Burke, 2017. "The Importance of Government Effectiveness for Transitions toward Greater Electrification in Developing Countries," Energies, MDPI, Open Access Journal, vol. 10(9), pages 1-17, August.
    10. Mohamad, Noorihsan, 2014. "Telecommunications reform and efficiency performance: Do good institutions matter?," Telecommunications Policy, Elsevier, vol. 38(1), pages 49-65.
    11. Matthias Finger & Rolf W. Künneke (ed.), 2011. "International Handbook of Network Industries," Books, Edward Elgar Publishing, number 12961.
    12. Estache, Antonio & Wren-Lewis, Liam, 2010. "What Anti-Corruption Policy Can Learn from Theories of Sector Regulation," CEPR Discussion Papers 8082, C.E.P.R. Discussion Papers.
    13. Catarina Figueira & David Parker, 2011. "Infrastructure Liberalization: Challenges to the New Economic Paradigm in the Context of Developing Countries," Chapters,in: International Handbook of Network Industries, chapter 27 Edward Elgar Publishing.
    14. Solanes, Miguel & Jouravlev, Andrei, 2007. "Revisiting privatization, foreign investment, international arbitration, and water," Recursos Naturales e Infraestructura 129, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    15. Izak Atiyas, 2012. "Enhancing Competition in A Post-Revolutionary Arab Context: Does the Turkish Experience Provide any Lessons?," Working Papers 743, Economic Research Forum, revised Dec 2012.
    16. Seim, Line Tndel & Sreide, Tina, 2009. "Bureaucratic complexity and impacts of corruption in utilities," Utilities Policy, Elsevier, vol. 17(2), pages 176-184, June.
    17. Kenny, Charles, 2009. "Is there an anticorruption agenda in utilities?," Utilities Policy, Elsevier, vol. 17(2), pages 156-165, June.
    18. Antonio Estache & L. Wren-Lewis, 2008. "Towards a Theory of Regulation for Developing Countries: Following Laffont's Lead," Working Papers ECARES 2008_018, ULB -- Universite Libre de Bruxelles.
    19. Antonio Estache & Liam Wren-Lewis, 2009. "Toward a Theory of Regulation for Developing Countries: Following Jean-Jacques Laffont's Lead," Journal of Economic Literature, American Economic Association, vol. 47(3), pages 729-770, September.
    20. Graziano Abrate & Fabrizio Erbetta & Giovanni Fraquelli & Davide Vannoni, 2015. "The cost of corruption in the Italian solid waste industry," Industrial and Corporate Change, Oxford University Press, vol. 24(2), pages 439-465.
    21. Hausman, William J. & Neufeld, John L. & Schreiber, Till, 2014. "Multilateral and bilateral aid policies and trends in the allocation of electrification aid, 1970–2001," Utilities Policy, Elsevier, vol. 29(C), pages 54-62.
    22. Kenny, Charles & Soreide, Tina, 2008. "Grand Corruption in Utilities," Policy Research Working Paper Series 4805, The World Bank.
    23. Hulya Dagdeviren & Simon A. Robertson, 2009. "Access to Water in the Slums of the Developing World," Working Papers 57, International Policy Centre for Inclusive Growth.
    24. Guasch, J. Luis & Straub, Stphane, 2009. "Corruption and concession renegotiations.: Evidence from the water and transport sectors in Latin America," Utilities Policy, Elsevier, vol. 17(2), pages 185-190, June.

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    Keywords

    Corruption; Privatization; Regulation; Utilities;

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