region. Our results suggest that power constraints affect the TFPR by reducing firms’ capacity utilization (they no longer operate at full capacity) and by increasing direct losses due to numerous power outages. Finally, we have identified the acquisition of back-up generators and R&D investments as important factors in mitigating power constraints for firms in developing countries.

In terms of recommendations, we would like first to recall that manufacturing firms are the main drivers of economic growth in developing countries. To fully play their part in the path to emergence, these firms need to benefit from a modern, reliable and affordable power service. However, this requires the establishment of a financially viable power sector. To achieve this, on the supply side, the authorities must set up independent regulatory agencies in order to put in place appropriate measures, notably tariff (automatic tariff adjustment mechanisms, cost reflectivity, etc.) and non-tariff measures (development of a master plan for instance) to reassure investors. Combined with the opening-up of the power generation to private actors (through IPPs, PPPs, etc.), this will make it possible to move capital into the sector and thus reduce the investment gap. In parallel with this effort to improve the power infrastructure, strengthen the quality of the country’s institutions as a whole in order to attract foreign investors in various sectors and boost economic growth (Acemoglu et al., 2002; Rodrik, 2006) in order to drive the demand for power for the viability of the entire power sector. A viable power sector attracts more capital and provides quality power service to firms, which will in turn be more productive and competitive. This would create a virtuous circle for the whole economy.

# **References**

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