Sector Reforms and Institutional Corruption: Evidence from Electricity Industry in Sub-Saharan Africa

Mahmud I. Imam*, Tooraj Jamasb, Manuel Llorca

*Corresponding author for this work

Research output: Contribution to journalJournal articlepeer-review

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.
Original languageEnglish
JournalEnergy Policy
Volume129
Issue numberJune
Pages (from-to)532-545
Number of pages14
ISSN0301-4215
DOIs
Publication statusPublished - Jun 2019
Externally publishedYes

Keywords

  • Electricity sector reform
  • Corruption
  • Sub-Saharan Africa
  • Panel data
  • Dynamic GMM

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