**_Electricity Sector Reform in Developing Countries, Jamasb, Mota, Newbery, Pollitt_**

reform scores. Further, distributional conflicts exhibit some positive (and significant) relation with the extent of reform, while economic ideology shows a positive and mostly significant relation with the reform score.

Most countries that have introduced competition have also undertaken privatisation, so obtaining similar tendencies in results from the models with competition and privatisation is only to be expected. A separate dependent regulation variable would also be a suitable complement to competition and privatisation variables. The dependent variables in the study aggregate relevant aspects of the sector, and do not separate the effect of the institutional factors on potentially competitive generation and regulated transmission and distribution networks. The relatively low R-square values (0.14 to 0.37) suggest that the examined institutional factors, although significant, explain a limited amount of the variation in the dependent variables.

The study shares some of the shortcomings seen in other analyses of electricity reform. An important issue is the definition and construction of variables that comprise different components. There is also a temporal problem: the dependent variables seem to be calculated for 1998, while the variables that are used for the computation of the independent and control variables are for different time periods. The study does not treat the endogeneity that this is likely to exist in this context. In addition, the study presents only R squares or p values for the regressions. For example, the Likelihood Ratio test could be used to examine the significance of the whole regression (where the null is specified so that all coefficients are zero and therefore the regression has no power in explaining the phenomenon).

While some studies examine the determinants of reforms, others focus on the effect of various aspects of reform (e.g. regulation, restructuring, and privatisation) on the performance of the sector. Steiner (2001) tests whether the regulatory environment, the degree of vertical integration and the degree of private ownership have an impact on efficiency and on prices. Efficiency is measured by capacity utilisation rate and reserve margin in electricity generation. Liberalising regulation, restructuring and private ownership are expected to lead to improved efficiency, and lower industrial electricity prices and industrial/residential price ratios. These hypotheses are tested for a panel dataset of 19 OECD countries for the period 1987-1996. There are controls for previous commitment to generation technology and the control for GDP serves as proxy for electricity market size. There are no controls for institutions or for macroeconomic policy.

Steiner (2001) finds that utilisation rate is positively and significantly correlated with both private ownership and unbundling of generation and transmission. The coefficient on third-party-access, however, is not significant. The results also confirm the hypothesis for the reserve margin, with the exception of third-party-access, which is again statistically insignificant. With respect to the impact on prices, the estimated coefficients on unbundling of generation and transmission, and on third party access are not significant. Contrary to expectations, the coefficient on ownership is positive and significant, which suggests that private ownership is not necessarily correlated with increased competition. The establishment of a spot market was found to lead to lower prices. The results of the price ratio indicate that the benefits of reform are 14