Caught between theory and practice

Government, market, and regulatory failure in electricity sector reforms

Rabindra Nepal

Research output: Contribution to journalArticleResearchpeer-review

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Abstract

Electricity sector in many developing countries since the early 1990s have revealed the complexities of introducing market-based reforms in network and infrastructure industries. This paper reflects on the experience to date with the process and outcomes of electricity reforms in smaller electricity systems of less-developed and transition economies. In particular, we use case studies of Belarus and Nepal, two countries that in many respects reflect the current state of reform efforts but have not received much scrutiny in the literature. The evidence suggests similarities in the electricity sectors of less-developed and transition economies, even though the contexts vary significantly. The need to balance economic efficiency, sustainability and social equity, and to maintain adequate investment, remains challenging despite more than two decades of experience with reforms. The dynamics of the electricity supply industry and policy objectives imply that reforms evolve continuously and thus remain work in progress, and their success or failure is a complex function of micro- and macro-economic as well as institutional factors.
Original languageEnglish
Pages (from-to)16-24
Number of pages9
JournalEconomic Analysis and Policy
Volume46
DOIs
Publication statusPublished - Jun 2015
Externally publishedYes

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Government
Electricity sector
Transition economies
Industry
Belarus
Developing countries
Sustainability
Macroeconomic factors
Institutional factors
Social equity
Nepal
Electricity supply
Microeconomics
Electricity
Electricity reform
Economic efficiency

Cite this

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title = "Caught between theory and practice: Government, market, and regulatory failure in electricity sector reforms",
abstract = "Electricity sector in many developing countries since the early 1990s have revealed the complexities of introducing market-based reforms in network and infrastructure industries. This paper reflects on the experience to date with the process and outcomes of electricity reforms in smaller electricity systems of less-developed and transition economies. In particular, we use case studies of Belarus and Nepal, two countries that in many respects reflect the current state of reform efforts but have not received much scrutiny in the literature. The evidence suggests similarities in the electricity sectors of less-developed and transition economies, even though the contexts vary significantly. The need to balance economic efficiency, sustainability and social equity, and to maintain adequate investment, remains challenging despite more than two decades of experience with reforms. The dynamics of the electricity supply industry and policy objectives imply that reforms evolve continuously and thus remain work in progress, and their success or failure is a complex function of micro- and macro-economic as well as institutional factors.",
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Caught between theory and practice : Government, market, and regulatory failure in electricity sector reforms. / Nepal, Rabindra.

In: Economic Analysis and Policy, Vol. 46, 06.2015, p. 16-24.

Research output: Contribution to journalArticleResearchpeer-review

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AB - Electricity sector in many developing countries since the early 1990s have revealed the complexities of introducing market-based reforms in network and infrastructure industries. This paper reflects on the experience to date with the process and outcomes of electricity reforms in smaller electricity systems of less-developed and transition economies. In particular, we use case studies of Belarus and Nepal, two countries that in many respects reflect the current state of reform efforts but have not received much scrutiny in the literature. The evidence suggests similarities in the electricity sectors of less-developed and transition economies, even though the contexts vary significantly. The need to balance economic efficiency, sustainability and social equity, and to maintain adequate investment, remains challenging despite more than two decades of experience with reforms. The dynamics of the electricity supply industry and policy objectives imply that reforms evolve continuously and thus remain work in progress, and their success or failure is a complex function of micro- and macro-economic as well as institutional factors.

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