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Sector reforms and institutional corruption: Evidence from electricity industry in Sub-Saharan Africa

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  • Imam, Mahmud I.
  • Jamasb, Tooraj
  • Llorca, Manuel

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.

Suggested Citation

  • Imam, Mahmud I. & Jamasb, Tooraj & Llorca, Manuel, 2019. "Sector reforms and institutional corruption: Evidence from electricity industry in Sub-Saharan Africa," Energy Policy, Elsevier, vol. 129(C), pages 532-545.
    • Handle: RePEc:eee:enepol:v:129:y:2019:i:c:p:532-545
    DOI: 10.1016/j.enpol.2019.02.043
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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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