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Bribes, bureaucracies, and blackouts: How corruption impacts the quality of electricity supply

In the 2014 paper Bribes, bureaucracies, and blackouts: Towards understanding how corruption impacts the quality of electricity supply to end-users in transition and developing economies Jacquelyn Pless highlights that poor electricity service delivery has critical implications for economic growth, particularly for developing countries. The author looks at how a better understanding of the causes of ‘non-technical’ electricity losses, can contribute to dialogue on effective policy measures seeking to improve electricity supply and its related institutions.

The researcher used an unbalanced pseudo-panel covering survey data from firms in 121 countries over the time period of 2006 to 2010. Results indicated that when firms in an economy offer informal gifts or payments in return for an electricity connection, the overall quality of electricity supply decreases as measured by increased monthly power outages, higher percentages of electricity coming from back-up generators, and higher percentages of total sales lost to electricity outages. The author also found that female participation in firm ownership decreases the chance that a firm will decide to offer a bribe for an electrical connection, and that market competition decreases the magnitude of bribes offered to public officials in order to ‘get things done.’