Executive Summary

Anupama Sen* Rabindra Nepal** Tooraj Jamasb*** & Tooraj Jamasb

February 2016

After more than two decades of attempts at electricity sector reform, there is a strong case for assessing empirical evidence on its outcomes, particularly for developing countries. Electricity reform programmes , implemented through the ‘standard’ or ‘textbook’ model, have their foundations in standard microeconomic theory and are based on the rationale that restructuring towards greater competition can lead to higher efficiency, maximise economic welfare, and transfer surplus to consumers. In practice, this has not always been the case, even in the OECD economies which pioneered the standard model.

This paper investigates the outcomes of the standard model for developing countries, by applying instrumental variable regression techniques on an original and previously untested panel dataset covering 17 non – OECD developing Asian economies spanning 23 years. While there is some cross – country literature on the effects of electricity reforms in developed and developing economies, there has been no systematic attempt thus far to examine their technical, economic and welfare impacts whilst accounting for cross – country institutional differences, for non – OECD Asian developing economies.

This paper fills a gap in the literature in the following ways: First, to our knowledge, this paper is the first to empirically assess the impact of electricity reforms on non – OECD Asian countries as a whole. Second, it applies econometric techniques to a new panel data set on 17 non – OECD developing Asian economies, from 1990 – 2013, which allows for cross – country comparisons whilst controlling for differing institutional and political contexts. Third, it draws the link between electricity reform and sector (technical) performance, economic impacts, and welfare indicators, assuming a cumulative impact of reform. In contrast with the theoretical literature, our results show a tension between wider economic impacts and welfare impacts for consumers: namely, the variables that are associated with a positive effect on economic growth appear to be associated with a negative impact on welfare indicators. Tiếp tục đọc “Reforming Electricity Reforms? Empirical Evidence from Asian Economies” →