Table 7 details correlations between the new Getting Electricity variables and the five outcome indicators. Correlations are positive and statistically significant between the cost to get a connection as of income per capita and distribution and transmission losses and the % of sales lost due to electrical outages. The time and cost to obtain an electricity connection are also negatively correlated with the electrification rate and the perception of electricity quality and bribes in electricity indicator. The procedures to obtain an electricity connection are positively correlated with the time and cost to obtain a connection and negatively correlated with the perception of electricity quality and bribes in electricity indicator. The highest correlation coefficients can be found between the Quality of Electricity score and the Bribes in Electricity score (0.83), the Quality of Electricity score and the electrification rate (0.65) the electrification rate and the cost to get an electricity connection (0.56), the value lost due to outages variable and the quality of electricity score (-0.57) and the Bribes in Electricity Score and the electrification rate (0.52).

# **IV. Results**

In order to establish the explanatory value of the new indicators, we examine the newly collected data in view of three questions. First, we examine how much explanatory power our new aggregated Getting Electricity index has for the general performance of the electricity sector. Second, we try to understand to what extent it moves in similar ways as other indicators of government regulation. To that end we compare the new indicator with other Doing Business measures of government regulation. And third, we look to establish if a less cumbersome and less costly process of obtaining an electricity connection is associated with better firm performance.

# **IV.1. Are electricity connections easier where the electricity sector performs better overall?**

In low-income countries where only 22 percent of the population is connected to electricity (Table 6), obtaining an electricity connection remains an important barrier for individuals and firms. But even where connections are accessible, the quality of electricity supply can weigh down on business activity. 41 percent of firms surveyed by the World Bank’s Enterprise surveys consider electricity either a very severe or major obstacle to the operations of their business (Table 15a). This is, especially true, for firms in South Asia and Sub-Saharan Africa, where firms are also more likely to own a generator and report the greatest number of power outages per month (Tables 15b to 15c).

To assess whether connection and other electricity sector problems go hand in hand, we regress our new measures of connection procedures, time and cost on various indicators that measure the overall performance of the electricity sector. Tables 8 to 12 present our main findings.

We use the share of the population connected to electricity as the dependent variable and the number of procedures, time and cost of obtaining an electricity connection as independent variables (Table 8). In an additional specification, we use the aggregated “Getting Electricity” indicator as independent variable. With only 84 observations for the electrification rate, the sample 14