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Durham University

Durham Energy Institute

News

New Working paper on Power Sector Reform and Corruption in Sub-Saharan Africa

(30 January 2018)

This working paper by DEI co-Director, Prof Tooraj Jamasb, and DEI Fellow, Dr Manuel Llorca, investigates whether electricity sector reforms in SubSaharan African countries have mitigated or exacerbated corruption. The results suggest that well-designed reforms do boost economic performance of the sector.
 In order to reduce the influence of corruption on electricity sector performance, most SubSaharan African countries have implemented sector reforms. However, after nearly two and half decades of reforms, there is no evidence whether these reforms have mitigated or exacerbated corruption. Neither is there evidence of performance improvements of reforms in terms of technical, economic or welfare impact. This paper aims to fill this gap. Using data from 47 Sub-Saharan African countries from 2002 to 2013 we analyse the impact of corruption and two key aspects of electricity reform model – creations of independent regulatory agencies and private sector participation – on three 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. However, these adverse effects are reduced where independent regulatory agencies are established and privatisation is implemented. Our results suggest that well-designed reforms not only boost economic performance of the sector directly, but also indirectly reduce the negative effects of macro level institutional deficiencies such as corruption on micro and macro indicators of performance.
 
Power Sector Reform and Corruption: Evidence from Sub-Saharan Africa, EPRG Working Paper 1801, Cambridge Working Paper in Economics 1801, (2018) Mahmud I. Imam, ToorajJamasb, and Manuel Llorca