Reforming the power sector in transition: Do institutions matter?

This paper aims to investigate the often poorly explored link between powersector reforms and wider institutional reforms in the economy across different groups of transition countries. We use panel-data econometrics based on bias corrected dynamic fixed effect analysis (LSDVC) to assess the impact of reforms on macroeconomic and powersector outcomes. The results indicate that powersector reform is highly inter-dependent with wider reforms in other sectors of the economy. The findings indicate that failure to harmonize inter-sector reforms leads to powersector reform measures being ineffective. We conclude that the success of powersector reforms in developing countries largely depend on the extent to which they synchronize inter-sector reforms in the economy.