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 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.

Bibliographic Details

Main Author:	Vagliasindi, Maria
Language:	English en_US
Published:	World Bank, Washington, DC 2012-07
Subjects:	AFFILIATED ORGANIZATIONS, APPROACH, AVAILABILITY, BANK POLICY, BENCHMARKING, CLIMATE CHANGE, COAL, COMPARATIVE ANALYSIS, CONSUMERS, DEMAND FOR ELECTRICITY, DEMOCRACY, DEVELOPING COUNTRIES, DEVELOPMENT POLICY, DISTRIBUTION LOSSES, DUMMY VARIABLE, ECONOMETRIC ANALYSIS, ELECTRIC GENERATION, ELECTRICITY, ELECTRICITY DISTRIBUTION, ELECTRICITY GENERATION, ELECTRICITY GENERATION CAPACITY, ELECTRICITY SYSTEM, ELECTRICITY UTILITIES, EMISSIONS, ENERGY SOURCES, ENVIRONMENTAL FACTORS, ENVIRONMENTAL SUSTAINABILITY, EXPENDITURE, FINANCIAL CRISES, FINANCIAL CRISIS, FUEL, FUTURE RESEARCH, GAS, GDP, GDP PER CAPITA, GENERATION, GENERATION CAPACITY, GOVERNANCE INDICATOR, GOVERNANCE INDICATORS, INCOME, INCOME LEVEL, INTERNATIONAL BANK, INVESTMENT INCENTIVES, LEVY, MACROECONOMIC CONTROL, MACROECONOMIC CONTROLS, MACROECONOMIC VARIABLE, MARKET SIZE, MONETARY POLICY, NATURAL GAS, POLITICAL ECONOMY, POLITICAL SYSTEM, POWER, POWER ELECTRONICS, POWER GENERATION, POWER SECTOR, POWER SYSTEM, POWER SYSTEMS, PRICE CAPS, PRICE OF OIL, PRIVATE FINANCE, PRIVATE INVESTMENT, PRIVATE INVESTOR, PRIVATE INVESTORS, PRIVATIZATION, PRIVATIZATIONS, PUBLIC-PRIVATE PARTNERSHIP, RATE OF RETURN, REGIONAL DUMMIES, REGULATOR, REGULATORS, REGULATORY AGENCIES, REGULATORY AGENCY, REGULATORY FRAMEWORK, REGULATORY GOVERNANCE, REGULATORY REGIMES, REGULATORY RULES, REGULATORY SYSTEM, RENEWABLE ENERGY, RENEWABLE ENERGY MARKET, SHARE OF INVESTMENT, SOURCE OF ENERGY, STRATEGIC INVESTORS, SUSTAINABLE ENERGY, TELECOMMUNICATIONS, TELECOMMUNICATIONS REGULATION, TRANSITION ECONOMIES, TRANSMISSION SYSTEM, WIND, WORLD DEVELOPMENT INDICATORS,
Online Access:	http://documents.worldbank.org/curated/en/2012/07/16481455/role-regulatory-governance-driving-ppps-electricity-transmission-distribution-developing-countries-cross-country-analysis https://hdl.handle.net/10986/11935
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