When extractive political institutions affect public-private partnerships: Empirical evidence from Indonesia's independent power producers under two political regimes*

Yohanna M.L. Gultom

Energy Policy, 2021, vol. 149, issue C

Abstract: This paper examines how extractive political institutions are associated with the performance of public-private partnerships (PPPs) using the case of the electricity sector in Indonesia, where a political regime shift has impacted the independent power producers’ (IPPs) arrangements in the power generation sector. Using a two-stage empirical strategy (data envelopment analysis and the difference-in-differences regression), I analyzed the economic performance of 20 coal-fired plants for the period between 2010 and 2016 that consists of IPPs endorsed by the two political regimes, both authoritarian and democratic, and the state-owned power plants. The results indicate that the extractive political institutions are associated with a reduced efficiency of the IPPs endorsed by the authoritarian Soeharto regime by −0.135 points, or 0.16% of the mean, showing that across all other power plants that produced the same output, the plants endorsed by the Soeharto regime used input or expenditure 0.16% higher than the average input or expenditure used by other plants. These findings are consistent with the political economy argument that extractive political institutions might have created economic policies that allow for the political elite to extract rents from PPPs.

Keywords: Political economy; Public-private partnerships; Energy; Independent power producer; Economic performance (search for similar items in EconPapers)
JEL-codes: H54 L32 P16 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0301421520307539
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:149:y:2021:i:c:s0301421520307539

DOI: 10.1016/j.enpol.2020.112042

Access Statistics for this article

Energy Policy is currently edited by N. France

More articles in Energy Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().