particular attention by researchers and policy makers is whether better sector performance for infrastructure services can be linked to the quality of regulatory institutions (Kirkpatrick et al. (2002), Cubbin and Stern (2006), Andres et al. (2008)). For example, Cubbin and Stern (2006) show how the existence of a regulatory law and high quality of regulatory governance are associated with higher per capita electricity generation in a sample of 28 developing countries. And Andres et al. (2008) construct an Electricity Regulatory Governance Index to illustrate how the existence and quality of regulatory agencies has an effect on the performance of utilities in Latin America. We add to this literature by proposing an indicator set that measures some aspects of electricity regulation as they apply to distribution utilities. Some studies (Estache and Rossi (2004), Gassner et al. (2009), Kumbhakara and Hjalmarsson (1998)) have found private electricity utilities to be more efficient than public utilities. Our data show that privately owned utilities do not necessarily deliver connections faster, but they do so at a lower cost than their publicly owned counterparts.

The new data presented here complement existing electricity data in important ways. Our data set significantly surpasses the country coverage for even the most broadly available indicators such as electrification rates, value lost due to electrical outages and electrical power transmission and distribution losses (country coverage for these indicators varies from 84 countries to 129 observations compared to 183 for our data set – see Table 6). Also, our data are updated annually, which is a higher frequency than for most other data sets. Unlike other data, the methodology also allows for important insights into the drivers of strong or weak utility performance. By measuring the different procedures involved in getting an electricity connection and the associated delays and costs, the indicators can help identify specific bottlenecks and cost drivers in individual connection processes. The data also offer insights into selected regulatory issues around connection processes by recording procedures. Lastly, our data set is the first of its kind to provide policy makers across countries with detailed comparable information on connection costs.

We examine the data set in view of three questions: (i) First, we examine if the new data can reasonably be used as a proxy for the overall performance of the electricity sector in different countries. To test this hypothesis we look at whether a more efficient connection process is associated with better electricity sector outcomes. In particular, we look at the relationship with a country’s electrification rate, losses in the electricity system, the value lost due to outages as reported by firms through the World Bank’s Enterprise Surveys, and the perceived quality of the electricity supply and the frequency of bribe payments to utilities as reported by the experts surveyed by the World Economic Forum. We find that one additional procedure in the process for obtaining an electricity connection is not only associated with a 13 percentage point decrease in the perceived quality of the electricity supply, but also an 18 percentage point increase in the frequency of bribe payments to utilities. Furthermore, we find that a 1 percentage point increase in connection costs (as a % of GNI per capita) is associated with an increase of 3.2 percentage points in the transmission and distribution losses as percentage of 3