Privatization, Technical Efficiency and Welfare Consequences: The Case of the Côte d'Ivoire Electricity Company (CIE)

Plane, Patrick

doi:10.1016/s0305-750x(98)00139-9

Cited by 58 publications

(27 citation statements)

References 26 publications

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“…Therefore, extreme caution should be exercised in the generalisation of the Côte d'Ivorie model. While Plane (1999) focuses on management change, other studies examine other aspects of reform. Arocena and Waddams-Price (1999) and Hattori (1999) analyse the impact of regulatory reform.…”

Section: Efficiency Studiesmentioning

confidence: 99%

“…However, performance remains below the 1970's level when the electricity sector was under close government supervision and subject to hard budget constraints (Plane, 1999). • In the US, deregulation has resulted in a short-term decline in productive efficiency.…”

Section: Efficiency and Productivity Studiesmentioning

confidence: 99%

“…DEA uses linear programming to calculate the frontier and SFA uses econometric methods to estimate the best practice or frontier. Plane (1999) evaluates the impact of the privatisation of Côte d'Ivorie Electricity Company (CIE) on efficiency and on the distribution of welfare. Privatisation in this case has taken the form of a ten-year lease contract.…”

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confidence: 99%

See 2 more Smart Citations

Electricity Sector Reform in Developing Countries : A Survey of Empirical Evidence on Determinants and Performance

Jamasb¹,

Mota²,

Newbery³

et al. 2005

Policy Research Working Papers

140

116

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WPS3549 AbstractDriven by ideology, economic reasoning, and early success stories, vast amounts of financial resources and effort have been spent on reforming infrastructure industries in developing countries. It is, therefore, important to examine whether evidence supports the logic of reforms. This paper reviews the empirical evidence on electricity reform in developing countries. We find that country institutions and sector governance play an important role in success and failure of reform. Also, reforms also appear to have increased operating efficiency and expanded access to urban customers. However, they have to a lesser degree passed on efficiency gains to customers, tackled distributional effects, and improved rural access. Moreover, some of the literature is not methodologically robust and on par with general development economics literature. Further, findings on some issues are limited and inconclusive while other important areas are yet to be addressed. Until we know more, implementation of reforms will be more based on ideology and economic theory rather than solid economic evidence.Keywords: Electricity, reform, developing countries JEL Classification: L52, L94, Q48 E El le ec ct tr ri ic ci it ty y S Se ec ct to or r R Re ef fo or rm m i in n D De ev ve el lo op pi in ng g C Co ou un nt tr ri ie es s, , J Ja am ma as sb b, , M Mo ot ta a, , N Ne ew wb be er ry y, , P Po ol ll li it tt t 1 1 IntroductionSince the early 1990s, a large number of developed, transition and developing countries around the world have embarked on electricity sector reform. The pace and the extent of the trend has been remarkable and, by the end of 1990s, the majority of OECD countries and over 70 developing and transition countries had taken some steps toward reforming their electricity sector (Bacon, 1999;Steiner, 2001). This has occurred under a broad paradigm shift from state ownership and centralized organization of infrastructure industries to private ownership, public regulation and market-oriented structures (OECD, 2000). The technological progress and reform pioneered in some countries has encouraged others to follow suit.This trend primarily reflects dissatisfaction with the performance of traditional forms of organisation and a desire to improve efficiency and reduce fiscal drain in the public sector. Added to this is a growing questioning of the theoretical and empirical justification for state-owned enterprise, the development of models of competition within network utilities and theories of incentive regulation of private natural monopolies (see Newbery, 1999).The model adopted for the electricity supply industry (ESI) since the Second World War resulted in the use of costly generation technologies, neglect of customer services and economic inefficiency. Combined with the interruption of demand growth after the oil crisis of the 1970s, the traditional approach to the industry resulted in excess capacity. In addition, the perverse incentives of cost-of-service regulation had received serious criticism (Averch a...

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Section: Efficiency Studiesmentioning

confidence: 99%

Section: Efficiency and Productivity Studiesmentioning

confidence: 99%

See 1 more Smart Citation

Electricity Sector Reform in Developing Countries : A Survey of Empirical Evidence on Determinants and Performance

Jamasb¹,

Mota²,

Newbery³

et al. 2005

Policy Research Working Papers

140

116

View full text Add to dashboard Cite

show abstract

“…Los estudios que analizan los cambios en la eficiencia y la productividad total de los factores (Total Factor Productivity o TFP) a partir de métodos de estimación de fronteras, son poco concluyentes en favor de la hipótesis de incrementos de eficiencia y/o TFP tras la privatización (Chirwa, 2001(Chirwa, , 2004Fraquelli & Erbetta, 2000;Plane, 1999;Saal & Parker, 2000;Saal et al, 2007;Sueyoshi, 1998). En su trabajo Sueyoshi (1998), menciona que los resultados de las empresas privatizadas se ven influenciados por muchos factores como el entorno corporativo y el tipo de cliente al que atienden.…”

Section: Efectos De La Privatización En Los Resultados De Las Empresasunclassified

¿es La Privatización La Solución a Los Problemas De Ineficiencia De Las Empresas Públicas?: Revisión De La Literatura

Contreras¹,

Mendoza²

2012

LEBRET

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ResumenEste trabajo presenta el estado del arte sobre el efecto de la privatización en los resultados de las empresas públicas durante los años 1990 hasta la actualidad. Se realizó una revisión a profundidad, tanto a nivel internacional como nacional, de los trabajos que analizan el efecto de la privatización sobre los resultados de las empresas sujetas a cambios de propiedad. De esta forma, encontramos que la privatización conllevó a mejoras en los resultados y la eficiencia de algunas de las empresas privatizadas. No obstante lo anterior, no puede tomarse como una regla la relación entre propiedad y eficiencia, ya que la evidencia nos muestra que la empresa pública no es siempre más ineficiente. En el caso colombiano, aún quedan muchas preguntas por responder debido a la escasez de estudios que analicen el tema. Palabras clavePrivatización, eficiencia, productividad, competitividad. Clasificación JEL: E61, E69, L51. AbstractThis paper presents the state of the art of the effect of the privatization on the results of the public enterprises from 1990 to the present. A thorough review was carried out, nationally and internationally, on the works analyzing the effect of privatization on the performance of firms subject to ownership changes. Thus, we found that privatization led to improvements in performance and efficiency of some of the companies. Nevertheless, the relationship between ownership and efficiency cannot be taken as a rule, as evidence shows that public companies are not always more inefficient. In Colombia, there are still many unanswered questions due to the lack of studies analyzing the subject.

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“…Haskel and Syzmanski (1992) examine the impact the implementation of divisional management structure in the UK ESI in 1983. Plane (1999) estimates the total factor productivity of Côte d'Ivoire Electricity Company (CIE) and he finds that productive efficiency improved due to privatization. Hawdon (1996), using cross-sectional data for developing countries, finds that privatized firms in their sample had higher productivity efficiency.…”

Section: Literature Reviewmentioning

confidence: 99%

The Electricity Industry Reform in Korea: Lessons for Further Liberalization

Kim

2011

Infrastructure Regulation: What Works, Why and How Do We Know?

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In April 2001, the generation unit of Korea Electric Power Corporation (KEPCO) was split into six subsidiary companies with further plans for privatization. But, the process of privatization has ceased due to changes in political environment. This study analyzes the performance of the restructuring of generation units using financial and physical indices. The results from the analysis also show that the restructuring has had positive effect on their performance. The financial indices of the generation companies also show that the prices of fuels, intervention of government, and capability of management affect the performance of the companies. Although the results do not show that restructuring favorably affected the prices of electricity, the indices of liability and profitability show some promising signs arising from the electricity sector reform. To maintain these changes, further liberalization needs to be followed, although there are some issues that need to be dealt with prior to restructuring and privatization plans. The problems of proper reserve margin, the negative effect of regional electricity company, and the conflict between cost saving and preserving environment are some of those need to be dealt with. Those problems can be solved by institutional reform and further liberalization.

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Privatization, Technical Efficiency and Welfare Consequences: The Case of the Côte d'Ivoire Electricity Company (CIE)

Cited by 58 publications

References 26 publications

Electricity Sector Reform in Developing Countries : A Survey of Empirical Evidence on Determinants and Performance

Electricity Sector Reform in Developing Countries : A Survey of Empirical Evidence on Determinants and Performance

¿es La Privatización La Solución a Los Problemas De Ineficiencia De Las Empresas Públicas?: Revisión De La Literatura

The Electricity Industry Reform in Korea: Lessons for Further Liberalization

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