The political economy of public utilities: A study of the power sector

K.P. Kannan and N. Vijayamohanan Pillai
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K.P. Kannan: Centre for Development Studies
N. Vijayamohanan Pillai: Centre for Development Studies

Centre for Development Studies, Trivendrum Working Papers from Centre for Development Studies, Trivendrum, India

Abstract: In this paper, we attempt at an analysis of the political economy of the Indian power sector with special reference to Kerala in the light of a generic model of the political economy of public utilities we develop in the first part of the paper. The model seeks to explain the political economy of the rent seeking drives in a non-Smithian imperfect regime of self-interest maximisation, with a regulatory structure of the public utility described in a framework of the principal-agent relationship. In contrast to the usual neo-classical monolithic representation of principal and agent, we characterise each entity in a Marxian-Kaleckian vein, as a composite set of conflicting sectional interests. This helps us develop a comprehensive perspective of the politico-economic implications of the relationship among the public, government and utility. Based on this generic model, we seek to analyse, in the second part of the paper, the political economy of the power sector in India, with emphasis on Kerala. We also attempt, wherever possible, to estimate the costs of corruption involved in the administration of the power sector.

Keywords: India; political economy; rent seeking; principal-agent; public utility; power sector (search for similar items in EconPapers)
JEL-codes: E11 H10 H4 L94 N4 P16 (search for similar items in EconPapers)
Pages: 80 pages
Date: 2001-06
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Citations: View citations in EconPapers (4)

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