Does Private Sector Participation Improve Performance in Electricity and Water Distribution?

This study addresses the question with a rigorous econometric approach and distills global results from a multitude of evidence. The data set compiled is unique in its coverage, size, and composition, making it possible to address for the first time methodological problems that have plagued empirical research and hampered conclusive results. The findings provide some answers, but also indicate where the challenges lie going forward. Privately run water and electricity utilities outperform comparable state-owned companies in terms of labor productivity and operational efficiency, but staff reductions also occur. Policy makers need to be aware of and acknowledge both the benefits and the costs of reform. Clear communication between stakeholders plays an important role in the acceptance and success of private participation, and a strategy for mitigating labor issues should be an integral part of reform efforts. The study also makes it clear that the investment problem is not solved by private participation alone, and it raises questions about the scope for increasing residential tariffs in low-income countries and thus the long-term sustainability of improvements in service delivery, be it by public or private operators.

Bibliographic Details

Main Authors:	Gassner, Katharina, Popov, Alexander, Pushak, Nataliya
Language:	English en_US
Published:	Washington, DC : World Bank 2009
Subjects:	ACCESS TO SERVICES, ACCOUNTING, APPROACH, AVAILABILITY, BILL COLLECTION, CAPACITY BUILDING, CAPITAL EXPENDITURES, CAPITAL INVESTMENT, CHILD MORTALITY, COMPETITIVE ADVANTAGES, COMPETITIVE MARKETS, CONCESSION CONTRACTS, COPYRIGHT, COST SAVINGS, COVARIANCE MATRIX, CROSS-SUBSIDIES, CUSTOMER BASE, DATA ANALYSIS, DATA COVERAGE, DATA LIMITATIONS, DATA MANIPULATION, DISTRIBUTION LOSSES, DISTRIBUTION SERVICES, DISTRIBUTION UTILITIES, E-MAIL, EFFICIENCY IMPROVEMENTS, ELECTRIC UTILITIES, ELECTRICITY, ELECTRICITY COMPANIES, ELECTRICITY DISTRIBUTION, ELECTRICITY DISTRIBUTION COMPANIES, ELECTRICITY SECTOR, ELECTRICITY TARIFF, ELECTRICITY UTILITIES, EMPIRICAL ANALYSIS, EMPLOYMENT, ENERGY POLICY, ENTERPRISE PERFORMANCE, EXTERNALITIES, GLOBALIZATION, GROSS DOMESTIC PRODUCT, HOLDING COMPANY, HOUSEHOLDS, INDEPENDENT REGULATION, INFLATION, INSTITUTION, INSTITUTIONAL FRAMEWORK, INTERNAL CHANGES, INTERNATIONAL BENCHMARKING, INTERNATIONAL TELECOMMUNICATION, LEGAL ARRANGEMENTS, LEGAL FRAMEWORK, LEGAL STATUS, LICENSES, MANUFACTURING, MARGINAL COST, MATERIAL, MODEL SPECIFICATIONS, NETWORK SERVICES, NETWORKS, NUMBER OF CONNECTIONS, OPERATING EFFICIENCY, OPERATIONAL EFFICIENCY, OPERATIONAL IMPROVEMENTS, OPERATIONAL PERFORMANCE, OWNERSHIP OF INFRASTRUCTURE, PERFORMANCE INDICATORS, PERFORMANCE RESULTS, PERFORMANCE TARGETS, PRICE OF ELECTRICITY, PRIVATE COMPANIES, PRIVATE INVESTMENT, PRIVATE OPERATOR, PRIVATE OPERATORS, PRIVATE OWNERSHIP, PRIVATE PARTICIPATION, PRIVATE SECTOR, PRIVATE SECTOR PARTICIPATION, PRIVATIZATION, PRODUCTIVITY, PUBLIC, PUBLIC FINANCE, PUBLIC INVOLVEMENT, PUBLIC UTILITIES, PUBLIC WATER, PURCHASING POWER, QUALITY OF SERVICE, QUERIES, REGULATORS, REGULATORY AGENCIES, REGULATORY ARRANGEMENTS, REGULATORY COMMISSION, REGULATORY ENVIRONMENT, REGULATORY ENVIRONMENTS, RELIABILITY, RESIDENTIAL CUSTOMERS, RESIDENTIAL PRICES, RESULT, RESULTS, SANITATION SERVICES, SANITATION UTILITIES, SERVICE DELIVERY, SERVICE PROVISION, SERVICE QUALITY, SOFT BUDGET CONSTRAINTS, STATE-OWNED COMPANY, TARGETS, TARIFF REGULATION, TELECOMMUNICATIONS, TELEPHONE, TOTAL COSTS, UNBUNDLING, URBAN ECONOMICS, USES, UTILITY INDUSTRIES, UTILITY NETWORKS, UTILITY SERVICES, WATER DISTRIBUTION, WATER SANITATION, WATER SECTOR, WATER SERVICE, WATER SERVICES, WATER SUPPLY, WATER UTILITIES,
Online Access:	http://documents.worldbank.org/curated/en/2008/10/9949962/private-sector-participation-improve-performance-electricity-water-distribution https://hdl.handle.net/10986/6605
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