Bribes, bureaucracies, and blackouts: Towards understanding how corruption at the firm level impacts electricity reliability

Date: 01 February 2017

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 14 power outages per month and a 22% 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. This paper featured in the Research Highlight section of Nature Energy, Volume 2 Issue 1 January 2017

Jacquelyn Pless Harrison Fell

Economics of Sustainability

Bribes, bureaucracies, and blackouts: Towards understanding how corruption at the firm level impacts electricity reliability


Type: paper

Pless, J. & Fell, H. (2017). "Bribes, bureaucracies, and blackouts: Towards understanding how corruption at the firm level impacts electricity reliability". Resource and Energy Economics. Volume 47, February 2017, Pages 36–55


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