The Role of Regulatory Governance : A Cross-Country Analysis
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...
| Main Author: | |
|---|---|
| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2012
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2012/07/16481455/role-regulatory-governance-driving-ppps-electricity-transmission-distribution-developing-countries-cross-country-analysis http://hdl.handle.net/10986/11935 |
| Summary: | 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. |
|---|