Privatization of electricity distribution in the Northeast of Brazil: The good, the bad, the ugly or the naïve?

Silvestre, Bruno; Hall, Jeremy; Matos, Stelvia; Figueira, Luiz Augusto Pereira de Andrade

doi:10.1016/j.enpol.2010.07.015

Cited by 18 publications

(9 citation statements)

References 45 publications

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“…Additionally, the incentives for private sector for improvements achieved in quality outcomes are also generally limited. Therefore, in many cases, the PSP results in meeting the minimum quality requirements rather than exceeding them (Silvestre et al 2010;Pineau 2005;Ghanadan and Eberhard 2007). For PSP to impact quality, there should be a clear monitoring and incentive mechanism for achieving higher quality of services.…”

Section: Discussionmentioning

confidence: 95%

Impact of Private Sector Participation on access and quality of services: systematic review of evidence from the electricity, telecommunications and water supply sectors

John

Mahalingam

Deep

et al. 2014

Journal of Development Effectiveness

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Individual studies on the impact of such Private Sector Participation (PSP) have yielded mixed results. This study synthesises evidence on the impact of PSP on access and quality outcomes. Studies to be included for the review were selected using well-defined inclusion, exclusion and quality appraisal criteria. Meta-regression analysis of 90 observations from 17 econometric studies was used to synthesise the evidences. Evidence on access was stronger as compared to that of quality. This indicated that PSP as a tool for improving quality of services has not been effective. Among the three sectors studied, telecom sector showed the strongest evidence of a true empirical effect between access and PSP, indicating that PSP has been an effective strategy to improve telecom access. In the case of electricity and water supply, the evidence indicated a positive and negative impact on access, respectively, though the effect was not significant. Overall, the results suggested that the effectiveness of PSP in improving access and quality in infrastructure services delivery has been limited and underlines the need for creating appropriate monitoring and incentive structures to make PSP interventions more effective in improving outcomes.

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Section: Discussionmentioning

confidence: 95%

Impact of Private Sector Participation on access and quality of services: systematic review of evidence from the electricity, telecommunications and water supply sectors

John

Mahalingam

Deep

et al. 2014

Journal of Development Effectiveness

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“…As shown in column ( 7), IOUs have lower long term debt to equity by 65% than cooperatives. Finally, column (8) shows that total electricity output per unit of assets is about twice higher for IPPs while it is lower for IOUs by 41% than cooperatives. Table 3 suggests two important findings: First, the fact that IOUs produce the lower amount of electricity per unit of assets than their counterparts is consistent with the hypothesis that IOUs have incentives to over-invest in capital under the cost-of-service regulation.…”

Section: Differences In Financial Outcomesmentioning

confidence: 98%

“…The previous studies yield mixed results on the ownership effect on firm performances. For example, Rose and Joskow, 7 Silvestre et al., 8 and Triebs and Pollitt 9 find that private firms exhibit greater economic performances than public firms. Economic performances are differently defined across the previous studies, for example, technical efficiency, adopting new technologies, or total factor productivity.…”

Section: Literature Reviewmentioning

confidence: 99%

Firm structure, scale economies, and productivity in the U.S. electric power industry: A cost function analysis

Jang

2020

Energy & Environment

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This paper analyzes economic performances of cooperatives relative to other types of ownership in the US electric power industry. Specifically, the paper uses a panel data of electric utilities over 2001–2013 to analyze economic performances of cooperatives relative to for-profit firms and to investigate the sources of performance differences under a model of cost minimization. The results show that investor-owned utilities are more profitable than cooperatives, but there are no significant differences in physical productivity between investor-owned utilities and cooperatives. Independent power producers are more financially profitable and more physically productive than their counterparts. The results also support that although the industry exhibits substantial scale economies over a broad range of output, cooperatives are constrained to exploit the scale economies than other groups as it is limited by higher cost of financing. This suggests that while a small number of very large firms are not required for efficient production in the industry, mergers between cooperatives could provide substantial scale economies, as discussed in the literature.

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“…• Privatization of water providers per se does not lead to improved service quality (Dore, Kushner, & Zumer, 2004;Kirkpatrick, Parker, & Zhang, 2006); improvements in water quality are attributed instead to stricter quality regulation (Estache, Rossi, & Ruzier, 2004;Silvestre, Hall, Matos, Figueira, 2010) • Privatization of electricity providers per se does not lead to improved service quality (Bortolotti, Fantini, & Sinascalco, 1998;Zhang, Parker, & Kirkpatrick, 2008); improvements in service quality attributed to the presence of an independent regulator (Spiller, 1996), unbundling generation from transmission (Pollitt, 2008) and expanding access to the transmission network (Bortolotti et al, 2002)…”

Section: Notesmentioning

confidence: 99%

“…• Mixed results about whether privatization improves performance: 25 studies using mixed industry show significant improvements postprivatization, while 24 studies using mixed industries show no significant improvement • • 25 studies using samples of competitive industries (banking, manufacturing, airlines) show significant improvement in performance postprivatization of commercial enterprises • • 17 studies of the privatization of prior public services (telecommunication, electricity, water) show mixed performance outcomes and argue that the performance improvement was mainly due to regulatory change Service Quality • • Privatization of water providers per se does not lead to improved service quality (Dore et al, 2004;Kirkpatrick et al, 2006); improvements in water quality are attributed instead to stricter quality regulation (Estache et al, 2004;Silvestre et al, 2010) • • Privatization of electricity providers per se does not lead to improved service quality (Bortolotti et al, 1998;Zhang et al, 2008); improvements in service quality attributed to the presence of an independent regulator (Spiller, 1996), unbundling generation from transmission (Pollitt, 2008) and expanding access to the transmission network (Bortolotti et al, 2002) (continued)…”

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confidence: 99%

Privatization: Implications of a Shift from State to Private Ownership

Radić

Ravasi

Munir

2021

Journal of Management

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Privatization—defined here as the transfer of ownership of state-owned organizations to private parties—has attracted the attention of scholars across multiple fields. Privatization programs have been based on the assumption, grounded in microeconomic theory, that a shift from public to private ownership will incentivize more efficient management of available resources. However, failure to deliver the expected outcomes in some cases and the more nuanced perspective on state-ownership offered by recent research in management seem to challenge this assumption, calling for revisiting this literature. Our comparative review of existing studies suggests that the mixed results of privatization programs could be partly explained by what was privatized, how it was privatized, and the regulatory regime under which it was privatized. By doing so, our review provides conceptual clarity and structure to a rich but fragmented body of literature, making seemingly divergent findings more legible, outlining theoretical gaps, and identifying avenues for future exploration.

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Privatization of electricity distribution in the Northeast of Brazil: The good, the bad, the ugly or the naïve?

Cited by 18 publications

References 45 publications

Impact of Private Sector Participation on access and quality of services: systematic review of evidence from the electricity, telecommunications and water supply sectors

Impact of Private Sector Participation on access and quality of services: systematic review of evidence from the electricity, telecommunications and water supply sectors

Firm structure, scale economies, and productivity in the U.S. electric power industry: A cost function analysis

Privatization: Implications of a Shift from State to Private Ownership

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