Bribes, Bureaucracies and Blackouts: Towards Understanding How Corruption at the Firm Level Impacts Electricity Reliability

Jacquelyn Pless () and Harrison Fell ()
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Harrison Fell: Division of Economics and Business, Colorado School of Mines

No 2015-10, Working Papers from Colorado School of Mines, Division of Economics and Business

Abstract: This paper looks at whether bribes for electricity connections affect electricity reliability. Using detailed firm-level data, we estimate various specifications based upon repeated cross-sections and means-based pseudo-panels to show that bribes are closely related to poorer electricity reliability. We find that the propensity to bribe for an electricity connection is associated with an increase of 20 power outages per month and a 28% increase in annual sales lost due to power outages on average. The results parallel a tragedy of the commons story: electricity, which exhibits common-pool resource characteristics, suffers from overexploitation as self-interested individual firms rationally bribe for electricity, creating negative impacts in aggregate on the overall quality of the resource. Given the importance of electricity reliability for economic growth and development, the findings imply that improving oversight and enforcement measures at the consumer level targeting the reduction of bribery for electricity connections could contribute to growth and development.

Keywords: corruption; electricity; reliability; quality of government; institutions; common-pool resource (search for similar items in EconPapers)
JEL-codes: O1 Q4 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2015-12
New Economics Papers: this item is included in nep-ene and nep-reg
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Citations: View citations in EconPapers (5)

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http://econbus-papers.mines.edu/working-papers/wp201510.pdf First version, 2015 (application/pdf)

Related works:
Journal Article: Bribes, bureaucracies, and blackouts: Towards understanding how corruption at the firm level impacts electricity reliability (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:mns:wpaper:wp201510

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