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

In contrast to Bacon and Beasnt-Jones’ ahistorical approach, taking into account the fact that reforms must be designed in the context of previous policy commitments, we can test the effect of energy endowment, dependency on fuel imports or environmental commitment. Drillisch and Riechmann (1998) test the correlation between energy dependency and the choice of liberalisation model, as well as between commitments concerning the environment and the choice of liberalisation model. The paper also incorporates the date in which reforms started – for each year of delay (relative to the 1990 benchmark) half a point is deducted from the liberalisation index. The study is limited to a cross-section analysis, and a time effect is not explicitly incorporated into the model. A temporal dimension is, however, incorporated into the model in the form of the impact of past decisions on energy and electricity dependency, or on environmental commitment.

Also, Drillisch and Riechmann (1998) do not see reform as a sequence of steps, but use two types of model: one for wholesale and one for retail market. There is no control for institutional conditions, macroeconomic policy, and level of development or market size. The only other factors included in the model are the level of prices (i.e. high prices induce liberalisation) and a cultural link to the United Kingdom. These are limitations that refer to the formulation of the model. Another drawback of the study is the very restricted dimensions of reform included in the liberalisation index. For instance, it does not take into account corporatisation, privatisation, restructuring, regulatory change and the introduction of an independent regulator. Further, Drillisch and Riechmann (1998) finds a positive link between import independence and liberalisation but, interestingly, the estimated overall energy independence index is more significant than the independency index of the electricity sector alone. The study fails to detect significant interdependence between environmental commitment and the choice of liberalisation model.

Ruffin (2003) reports an econometric study of the institutional determinants of competition, ownership and extent of reform (dependent variables) in electricity sector restructuring. The institutional determinants (explanatory variables) used are different measures of judicial independence, distributional conflict, and economic ideology. The study uses a cross-section OLS regression analysis of a set of models with observations of up to 75 developed and developing countries that undertook some steps toward electricity reform during the 1990s. The study finds that the relation between judicial independence on the one hand, and competition and ownership on the other, is ambiguous; i.e. the coefficients are often insignificant or, when significant, their sign shifts across models. The results also suggest that greater distributional conflict is significantly correlated with a higher degree of monopoly, while in ownership models, the coefficients are mostly not significant. Moreover, the results indicate that the relation between economic ideology favouring competition and private ownership is generally positive and significant. Control variables, such as parliamentary control over government or per capita income, do not add much to the results.

In addition, Ruffin (2003) uses institutional explanatory factors with the electricity reform scores (as the number of reform steps taken) reported in ESMAP (1999) which reflect the extent of reform, including competition and privatisation. In these models, judicial independence shows a positive, though not always significant, relationship with 13