is relatively small. The results show that the time and cost to obtain an electricity connection are negatively correlated with the electrification rate and statistically significant at the 1-5% level. The same is true for the aggregate Getting Electricity ranking that combines all three variables into one aggregate index. However, once we control for income levels, all specifications lose their statistical significance and the coefficients become significantly smaller suggesting that differences in electrification rates are much more driven by income levels of countries than by the complexity of the process for connecting new customers.

Second, we use transmission and distribution losses as a % of output as the dependent variable (Table 9). Here the results show that a greater number of procedures to obtain an electricity connection are associated with a higher percentage of losses in the distribution and transmission system. This result is statistically significant at the 1% level, but like for the electrification rate the result loses its significance once we control for income. The results for the relationship between the cost of obtaining a connection and the transmission and distribution loss ratio are the only ones that retain their statistical significance. This correlation might be driven by utilities having to recuperate losses through higher costs on customers.

Third, we use values lost due to outages (as % of sales) as reported by the World Bank’s enterprise surveys as the dependent variable (Table 10). We find a positive association of the variable with both the number of procedures and the cost associated with obtaining an electricity connection. However, only the positive correlation with procedures remains statistically significant after we control for income. We also find the aggregate rank on the ease of getting electricity is positively and statistically significantly correlated with the Value lost due to outages variable. In fact, the results show that a 10-position improvement on the ease of getting electricity is associated with a 4-percentage point increase of the value lost due to outages as a percentage of annual sales.

We obtain similar results in our specification with the WEF’s Perceived Quality of Electricity Supply variable as the dependent variable (Table 11). As in the previous specification out of the three new variables, the number of procedures to obtain a new electricity connection has the greatest predictive power for the dependent variable. While greater procedures, time and cost are associated with a lower quality of electricity supply in the specification without the income control, only the specification with procedures remains statistically significant after controlling for the income effect. And, again like in the previous specification, a better rank on the overall ease of getting electricity is associated with greater quality of electricity supply.

To test whether the ownership structure of utilities plays a role, we have also included in each one of the four specifications a dummy for the ownership structure of the utility, which does not enter significantly in any of the four specifications. Also, the inclusion of ownership dummy affects the significance level of the coefficients for our new Getting Electricity variables only marginally.

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