- _Lease contract._ State ownership of infrastructure assets, joint ownership of operating assets, and private ownership of operating rights for a limited period; _management contract_ is similar to lease contract except that state owns operating assets.

Each of these can be treated as a different “on/off” variable, and this allows for the various forms of private involvement to have different sized impacts of the performance outcomes. Partial divestiture can change over time and it is possible that the impact on performance would be larger the greater the degree of divestiture.

The alternative approach to treating privatization as an “on/off” driver has been to measure privatization by the amount of private sector investment that entered the sector. Once the initial entry had occurred there would likely be further increases in private ownership and, as the share of the sector controlled by private capital increased, the overall performance of the whole sector could be expected to rise. Zhang et al. (2008) measured privatization by the share of generation capacity owned by private investors, while Balza et al. (2013) measured the degree of private participation by the cumulative private investment in the sector (relative to gross capital formation at the beginning of the period). Vagliasindi (2012) distinguished the generation and distribution sectors, measuring privatization by the share of privately owned generation capacity, or the share of privately owned retail sales.

- _The degree of regulation._ Most econometric studies of the impacts of reform policies have treated regulation as being either “on” or “off”. If there is a regulator, independent of the government, then regulation can be considered “on”, while in countries with no regulator, or where the regulator is not independent of the government, regulation is “off”. The definition of independence is important in this context and indicates the existence of an agency not directly under the control of a ministry (Zhang et al. 2005). This approach implies that the effectiveness of regulation is the same for all “independent” regulators and is ineffectual for all “non-independent” (or non-existent) regulators.

In an attempt to test the hypothesis that different degrees of regulatory independence could have a more varied impact, Cubbin and Stern (2006), building on earlier work by Domah, Pollitt and Stern (2002), proposed a set of four indicators (each of which took a value of zero or one, depending on its absence or presence). The sum of the four indictor scores was defined as the regulatory index (ranging between 0 and 4). The indicators selected were:

- An electricity regulatory law (1) or no law (0);

- An autonomous (1) or ministry (0) regulator

- License fee (1) or government budget (0) regulatory funding

- Free (1) or mandatory (0) civil service pay scales for regulatory staff.

The regulatory index was utilized instead of a simple dummy variable in an equation measuring the impacts of policies on sector performance. Balza, Jimenz and Mercado (2013) followed this approach, while Zhang et al. (2008) used the same approach except that the fourth component was replaced by the alternative: 15