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

Mahmud I. Imam, Tooraj Jamasb, and Manuel Llorca

March 2018

We analyse the impact of corruption and two key aspects of electricity sector reforms, such as the creation of independent regulatory agencies and private sector participation, on several performance indicators in Sub-Saharan Africa. We find that corruption reduces technical efficiency of the sector and constrains the efforts to increase access to electricity and national income. However, some negative effects are offset where independent regulators are established and privatisation is implemented. Our findings suggest that well-designed reforms not only boost economic performance of the sector, but also reduce the negative effects of macro-level institutional deficiencies, such as corruption, on performance indicators.

Keywords: electricity sector reform; corruption; Sub-Saharan Africa; panel data; dynamic GMM.