Aleksandra Peeroo
(University of Hertfordshire)
Alice Nicole Sindzingre
(SOAS, University of London/CEPN, University Paris-13)
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Non-existing public utilities that disrupt… and existing public utilities that are disrupted.
Panel Econ11 at conference ECAS 2019 Africa: Connections and Disruptions.
The lack of public utilities disrupts African economic activity. At the same time, the performance of existing utilities is disrupted because of competing interests of stakeholders or inappropriate institutional settings. The panel explores the underlying causalities and ways for improvement.
Long Abstract:
Public utilities such as electricity, water, transportation or telecommunications are the backbone of any economic activity, and their absence disrupts the economy. There can be no industrialisation without a reliable supply of electricity that would enable production, or transportation infrastructure that would allow exchange of goods. A lack of access to drinking water involves high opportunity costs and explains informality of labour and poverty. Due to tight budgets, governments find it difficult to address needs in terms of utilities and infrastructure. Hence, they might implement Public-Private Partnerships, hoping that the private partner will provide the missing finance, or turn towards international donors. In that respect, China has become a major player who constructs dams, power plants, bridges and other infrastructure in many Sub-Saharan African countries. Are these effective solutions to the problem of non-existing utilities disrupting the economy?
In addition to these developmental obstacles, many of those utilities that do exist are low-performing and hence, in a sense, are disrupted themselves: electric utilities are plagued by frequent blackouts, transport services are unreliable or dangerous, and major water losses make water provision unsustainable in the long-run, especially in a context of climate change. This kind of disruption from within the utility might be explained by organisational or institutional factors, such as low-performing contracts, corruption or the political economy that governs donor-recipient relations.
The panel invites both empirical and theoretical papers in order to explore the underlying causalities and constraints, and possible solutions to the issue of disruptive and disrupted utilities.
Talks about a "water crisis" in Mauritius have led decision-makers to construct new dams in order to increase water supply. Analysing the sector's political economy, this paper argues that poor performance is not caused by insufficient water supply but by inadequate water sector governance.
Paper long abstract:
Mauritian water services are the epitome of low-performance utilities typical of developing countries. Non-revenue water amounts to 55 percent, water supply is largely underpriced, infrastructure is deteriorating and 30 percent of the distribution network needs replacement, with estimated costs equivalent to nine years' worth of annual revenues of the public water provider.
The need to reform the Mauritian water sector has been acknowledged by decision-makers. However, the sector's dysfunctions are considered being the result of insufficient storage capacity and a desolate distribution network; hence the "reform" is driven by a supply-side approach and the construction of large-scale infrastructure such as new dams and reservoirs.
Until now, governance, i.e. the system in place to oversee, plan, direct, monitor and enforce transactions between various uses of water, has not been considered the cause for poor sector performance. This paper studies Mauritian water sector governance and reveals a lack of transparency, unclearly distributed and overlapping responsibilities and a lack of long-term vision endangering the sustainability of water provision. An analysis of the political economy of the Mauritian water sector exhibits that it is neither likely that any of these issues will be addressed under the current setting nor is it likely that the current setting will change. Therefore, the paper concludes, the performance of Mauritian water services is expected to remain low.
An implication of this research is that, for other developing countries, the Mauritian case tells a cautionary tale of the effectiveness of the reform of a highly political sector.
This paper explores how extreme heat and flooding impact on water and electricity provision in urban Ghana. These extreme weather events result in fluctuating and increasingly over-stretched utilities, which especially impact on living conditions and livelihoods in low-income communities.
Paper long abstract:
Many cities in sub-Saharan Africa are facing new challenges as they increasingly experience extreme weather events, linked to climate change, which disproportionately affect the urban poor. Focussing on extreme heat and flooding, this paper explores how these extreme weather events impact on infrastructure provision in low-income communities in urban Ghana. Climate data is linked to qualitative interview data collected in eight neighbourhoods within the cities of Accra and Tamale, and key informant interviews with water and electricity officials. The paper demonstrates how extreme heat and flooding events result in fluctuating and increasingly over-stretched utilities, and the ways in which disruptions to electricity and water provision are mutually reinforcing. These interruptions to public utilities especially impact on living conditions and livelihoods in low-income communities, whose inhabitants can least afford such disruptions. The paper argues that a better understanding and prediction of extreme weather events, and the ways in which they impact on infrastructure provision, would help contribute to introducing measures that can help public utilities reduce such disruptions and hence the vulnerability of low-income communities.
Via the example of African low-income economies, the paper argues that the mixed success of public utilities stems from inaccurate theoretical analysis and policies in view of geographical, taxation and infrastructural constraints, public goods in the context of poverty and policy externalisation.
Paper long abstract:
Though the post-WWII period conceived development as the outcome of active public policies, the 1980s witnessed the spreading at a global scale of a theoretical paradigm viewing state intervention in the economy as detrimental for growth, with as a background the assumption that excessive public spending and fiscal deficits reduce growth. The associated public policies were thus liberalisation and privatisation, which were uniformly conducted across the world ('austerity'), and in particular in low-income economies, for example in Sub-Saharan Africa/SSA, said to display low level of fiscal revenues and therefore low ability for the state to finance public utilities. Yet even mainstream economics now underscores the existence of market failures and externalities, which justify the public provision or regulation of services, while the developing countries that enjoyed spectacular growth ('developmental states') have relied on interventionist policies, which have been less aiming at an 'ownership' of the economy via publicly-owned utilities (with the risk of fiscal deficit) than the provision of incentives. At the empirical level, the outcomes of the privatisation of state-owned utilities have been mixed, particularly in SSA where the latter' public ownership has been a core of post-independence policies, even within the paradigm of service 'unbundling' that aimed at addressing these mixed outcomes. Via the example of SSA low-income economies, the paper argues that this mixed success stems from inaccurate theoretical analysis and policies in view of key characteristics of these economies: geographical, taxation and infrastructural constraints, public goods shaped by poverty and policy externalisation.
This paper looks at the potential of the Public-Private-Partnership in revamping the comatose Nigerian public sector. The study relies on secondary sources of data and descriptive method of analysis and is based on the New Public Management theory.
Paper long abstract:
The poor performance of the public sector in service delivery in most countries has intensified the argument about what should be the main role of the state in the economy. This argument has led to the emergence of two groups. Those who believe that the state has failed in its direct economic involvement and hence, should hands off completely and those that argue that though the state has failed in service delivery, it should not be discarded in favour of the market, but rather serious attempts should be made on public sector reforms. The core of these reforms are captured in the concept of new public management, which operates on the maxim that "government should steer and not row". This paper looks at the potential of the Public-Private-Partnership(PPP) in revamping the comatose Nigerian public sector. The study relied on secondary sources of data and descriptive method of analysis. Based on the New Public Management theory, the findings of the study indicate that though the PPP is a good option for Nigeria, but the main challenges remain those of good regulatory framework, corruption, limited capacity of the private sector, and un-cooperative attitude of the people. Based on this, the paper recommends the strengthening of the regulatory framework, intensified fight against corruption, involvement of capable private sector operators and public enlightenment.
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