The macroeconomic effects of electricity-sector privatization

Patrick Blagrave and Davide Furceri

Energy Economics, 2021, vol. 100, issue C

Abstract: We examine the macroeconomic effects of privatizing the ownership structure of the electricity market, using a novel indicator of privatization which covers 90 advanced, emerging market, and developing economies, since 1974. Privatization reforms, on average, improve outcomes in the provision of electricity and have positive macroeconomic effects: output and employment increase in the years following electricity-sector privatization reforms. Reforms are also associated also with an increase in income inequality, but the effects are small, on average. These impacts vary according to the business cycle, quality of institutions, and a country's development status, with macroeconomic and distributional outcomes generally positive when reforms are pursued during economic expansions and in countries with strong political and economic institutions. Macroeconomic outcomes also tend to be stronger in advanced economies.

Keywords: Electricity; Privatization; Local projections; Institutions (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:100:y:2021:i:c:s014098832100150x

DOI: 10.1016/j.eneco.2021.105245

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