Taking Stock of the Impact of Power Utility Reform in Developing Countries : A Literature Review
This paper reviews recent literature on the impacts of various components of power sector reform on the performance of electric utilities in developing countries. Recent literature is heavily focused on statistical testing of the significance of th...
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| Format: | Working Paper |
| Language: | English |
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World Bank, Washington, DC
2018
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| Online Access: | http://documents.worldbank.org/curated/en/343401527772117639/Taking-stock-of-the-impact-of-power-utility-reform-in-developing-countries-a-literature-review http://hdl.handle.net/10986/29889 |
| Summary: | This paper reviews recent literature on
the impacts of various components of power sector reform on
the performance of electric utilities in developing
countries. Recent literature is heavily focused on
statistical testing of the significance of the links between
four components of sector reform (unbundling, private sector
participation, regulation, and competition) and various
performance indicators (relating to utility performance,
user outcomes, and broader economic development). Some
studies exhibit methodological shortcomings in failing to
account for interactions between reforms or degrees of
reform; however, others appear to be robust. The strongest
result is that the introduction of private sector
participation is linked to a significant improvement in
labor productivity and distribution losses. Moreover,
unbundling reforms in isolation is found to have hardly any
significant impact on utility performance. The introduction
of an independent regulator or competition is not generally
significant across studies. A notable feature of all of the
studies is very limited testing of the effects of policy
introduction on performance indicators, such as bill
collection and the duration and frequency of outages. Poor
performance on these indicators of state-owned power
companies is well documented and bill collection has been
identified as a major hidden cost of unreformed power
sectors. The materiality of the impact of private sector
participation, on the various performance indictors found to
be significant, is calculated for studies that provide
sufficient information to do so. The size of the impact of
private sector participation on utility performance is
substantial in a couple of studies, although much more
modest in others. |
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