IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/6121.html
   My bibliography  Save this paper

The role of regulatory governance in driving PPPs in electricity transmission and distribution in developing countries : a cross-country analysis

Author

Listed:
  • Vagliasindi, Maria

Abstract

This paper presents new global evidence on the key determinants of public-private partnership investment in electricity transmission and distribution, based on a panel data analysis of 105 developing countries over a period of 16 years from 1993 to 2008. It aims to identify the key factors affecting the private investor's decision to enter electricity transmission and distribution, through a probit analysis and the amount of investment sunk in this market segment, based on Heckman's sample selection analysis. One of the key results of the analysis is that sector regulatory governance affects only the entry of private investors in electricity transmission and distribution. It is not significantly linked to higher investment in transmission and distribution. The result implies that the power of the incentive has not been so strong as to affect the volume of investment. Similarly, economy-wide governance factors, including control for corruption and degree of political competition, are factored in by private investors only in the initial stage of the game when the decision to enter into the transmission and distribution market is taken. This reinforces the expectation that private investors seem to be adequately protected against risks, so that once they have entered the market, they can accommodate the governance environment. Finally, the introduction of renewables in the power system enhanced overall public-private partnership investment in transmission and distribution. Renewable-based energy also requires technical and regulatory certainty about the availability of renewable-ready transmission resources.

Suggested Citation

  • Vagliasindi, Maria, 2012. "The role of regulatory governance in driving PPPs in electricity transmission and distribution in developing countries : a cross-country analysis," Policy Research Working Paper Series 6121, The World Bank.
    • Handle: RePEc:wbk:wbrwps:6121
    as

    Download full text from publisher

    File URL: http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2012/07/09/000158349_20120709113758/Rendered/PDF/WPS6121.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Joskow Paul L., 2008. "Incentive Regulation and Its Application to Electricity Networks," Review of Network Economics, De Gruyter, vol. 7(4), pages 1-14, December.
    2. Vagliasindi, Maria, 2004. "The role of investment and regulatory reforms in the development of infrastructure across transition economies," Utilities Policy, Elsevier, vol. 12(4), pages 303-314, December.
    3. Jamasb, Tooraj & Pollitt, Michael, 2007. "Incentive regulation of electricity distribution networks: Lessons of experience from Britain," Energy Policy, Elsevier, vol. 35(12), pages 6163-6187, December.
    4. Luis Andres & José Luis Guasch & Sebastián Lopez Azumendi, 2009. "Regulatory Governance and Sector Performance: Methodology and Evaluation for Electricity Distribution in Latin America," Chapters, in: Claude Ménard & Michel Ghertman (ed.), Regulation, Deregulation, Reregulation, chapter 6, Edward Elgar Publishing.
    5. Gutierrez, Luis Hernando, 2003. "The Effect of Endogenous Regulation on Telecommunications Expansion and Efficiency in Latin America," Journal of Regulatory Economics, Springer, vol. 23(3), pages 257-286, May.
    6. Paul L. Joskow, 2006. "Incentive Regulation for Electricity Networks," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 4(02), pages 3-9, July.
    7. Paul Levine & Paul Levine & Jon Stern & Francesc Trillas, 2003. "Independent Utility Regulators: Lessons from Monetary Policy," School of Economics Discussion Papers 0403, School of Economics, University of Surrey.
    8. Grobman, Jeffrey H. & Carey, Janis M., 2001. "Price caps and investment: long-run effects in the electric generation industry," Energy Policy, Elsevier, vol. 29(7), pages 545-552, June.
    9. repec:ces:ifodic:v:4:y:2006:i:2:p:14567496 is not listed on IDEAS
    10. Jean-Jacques Laffont & Jean Tirole, 1993. "A Theory of Incentives in Procurement and Regulation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121743, April.
    11. Paul L. Joskow, 2006. "Incentive Regulation for Electricity Networks," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 4(2), pages 3-9, 07.
    12. Kydland, Finn E & Prescott, Edward C, 1977. "Rules Rather Than Discretion: The Inconsistency of Optimal Plans," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 473-491, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gómez, Tomás & Mateo, Carlos & Sánchez, Álvaro & Reneses, Javier & Rivier, Michel, 2011. "La retribución de la distribución de electricidad en España y el modelo de red de referencia/The Remuneration of Electricity Distribution in Spain and the Reference Network Model," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 29, pages 661(24.)-66, Agosto.
    2. Kemp, Alexander G. & Phimister, Euan, 2010. "Economic Principles and Determination of Infrastructure Third Party Tariffs in the UK Continental Shelf (UKCS)," SIRE Discussion Papers 2010-115, Scottish Institute for Research in Economics (SIRE).
    3. Ghosh, Ranjan & Kathuria, Vinish, 2016. "The effect of regulatory governance on efficiency of thermal power generation in India: A stochastic frontier analysis," Energy Policy, Elsevier, vol. 89(C), pages 11-24.
    4. Jamasb, Tooraj & Pollitt, Michael, 2007. "Incentive regulation of electricity distribution networks: Lessons of experience from Britain," Energy Policy, Elsevier, vol. 35(12), pages 6163-6187, December.
    5. T. Jamasb & R. Nepal, 2015. "Issues and Options in the Economic Regulation of European Network Security," Competition and Regulation in Network Industries, Intersentia, vol. 16(1), pages 2-23, March.
    6. Jamasb, Tooraj & Orea, Luis & Pollitt, Michael, 2012. "Estimating the marginal cost of quality improvements: The case of the UK electricity distribution companies," Energy Economics, Elsevier, vol. 34(5), pages 1498-1506.
    7. Jamasb, Tooraj & Pollitt, Michael, 2008. "Reference models and incentive regulation of electricity distribution networks: An evaluation of Sweden's Network Performance Assessment Model (NPAM)," Energy Policy, Elsevier, vol. 36(5), pages 1788-1801, May.
    8. Haney, Aoife Brophy & Pollitt, Michael G., 2009. "Efficiency analysis of energy networks: An international survey of regulators," Energy Policy, Elsevier, vol. 37(12), pages 5814-5830, December.
    9. Andreas Kuhlmann, 2007. "Essays on network industries : privatization, regulation, and productivity measurement," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 26.
    10. Cossent, Rafael & Gómez, Tomás, 2013. "Implementing incentive compatible menus of contracts to regulate electricity distribution investments," Utilities Policy, Elsevier, vol. 27(C), pages 28-38.
    11. Vogel, Philip, 2009. "Efficient investment signals for distributed generation," Energy Policy, Elsevier, vol. 37(9), pages 3665-3672, September.
    12. Richard Meade, 2015. "Incentives, Efficiency and Quality in Regulated Monopolies under Customer Ownership," Working Papers 2015-05, Auckland University of Technology, Department of Economics.
    13. Agrell, Per J. & Bogetoft, Peter & Mikkers, Misja, 2013. "Smart-grid investments, regulation and organization," Energy Policy, Elsevier, vol. 52(C), pages 656-666.
    14. Ariel Casarin, 2014. "Productivity throughout regulatory cycles in gas utilities," Journal of Regulatory Economics, Springer, vol. 45(2), pages 115-137, April.
    15. Tooraj Jamasb & Rabindra Nepal & Govinda Timilsina & Michael Toman, 2014. "Energy Sector Reform, Economic Efficiency and Poverty Reduction," Discussion Papers Series 529, School of Economics, University of Queensland, Australia.
    16. Meletiou, Alexis & Cambini, Carlo & Masera, Marcelo, 2018. "Regulatory and ownership determinants of unbundling regime choice for European electricity transmission utilities," Utilities Policy, Elsevier, vol. 50(C), pages 13-25.
    17. Jean-Michel Glachant & Haikel Khalfallah & Yannick Perez & Vincent Rious & Marcelo Saguan, 2013. "Implementing incentive regulation through an alignment with resource bounded regulators," Post-Print halshs-00767872, HAL.
    18. Chikkatur, Ananth P. & Sagar, Ambuj D. & Abhyankar, Nikit & Sreekumar, N., 2007. "Tariff-based incentives for improving coal-power-plant efficiencies in India," Energy Policy, Elsevier, vol. 35(7), pages 3744-3758, July.
    19. Cambini, Carlo & Franzi, Donata, 2013. "Independent regulatory agencies and rules harmonization for the electricity sector and renewables in the Mediterranean region," Energy Policy, Elsevier, vol. 60(C), pages 179-191.
    20. Shaw, Rita & Attree, Mike & Jackson, Tim, 2010. "Developing electricity distribution networks and their regulation to support sustainable energy," Energy Policy, Elsevier, vol. 38(10), pages 5927-5937, October.

    More about this item

    Keywords

    Energy Production and Transportation; Emerging Markets; Investment and Investment Climate; Economic Theory&Research; Debt Markets;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:6121. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Roula I. Yazigi (email available below). General contact details of provider: https://edirc.repec.org/data/dvewbus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.