Publication: The Costs of Corruption for the Poor—The Energy Sector
Loading...
Date
2000-04
ISSN
Published
2000-04
Author(s)
Editor(s)
Abstract
In recent years the fight against corruption has assumed a key place in development policy, as a way of strengthening economic growth and helping civil society and democracy to function. Corruption not only stifles growth. It also perpetuates or deepens inequality, as the few amass power and wealth at the expense of the many. The energy sector lends itself to corrupt practices. This is a result both of its traditional institutional arrangements-dominated by state monopolies controlling oil, gas, or electricity-and of the sheer amount of cash it can generate. Corruption in energy takes many forms, from petty corruption in meter reading and billing to grand corruption in the allocation of lucrative monopolies. These practices differ in scale but contribute to the same results-weak operational and financial performance and, for the poor in particular, declining service quality or reduced chances of ever accessing network services. The answer to corruption is continuing reform, to reduce the incentive and potential to capture monopoly rents and to increase the transparency of public and private transactions, regulatory structures, and decision-making processes.
Link to Data Set
Citation
“Lovei, Laszlo; McKechnie, Alastair. 2000. The Costs of Corruption for the Poor—The Energy Sector. Viewpoint. © World Bank. http://hdl.handle.net/10986/11437 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Publication Competition and Poverty(World Bank, Washington, DC, 2016-04)A literature review shows competition policy reforms can deliver benefits for the poorest households and improve income distribution. A lack of competition in food markets hurts the poorest households the most. Competition in input markets and between buyers helps farmers and small businesses. And more competitive markets bolster job growth over the longer term. More research is needed, however, to better understand the impact of competition reforms and antitrust enforcement on poverty and shared prosperity.Publication Export Competitiveness(World Bank, Washington, DC, 2015-06)This review of the empirical literature shows that industries with more intense domestic competition will export more. Competition law enforcement can be traced to export performance and is complementary to trade reforms. Pro-competition market regulation that reduces restrictions and promotes competition, where it is viable, is an important determinant for trade. The elimination of barriers to entry and rivalry, and a level playing field in upstream sectors contributes to export competitiveness in downstream manufacturing sectors. In some sectors, effective competition policy can directly lower trade costs.Publication Investment Climate in Africa(World Bank, Washington, DC, 2015-07-01)The World Bank Group has been working on investment climate reform in Sub-Saharan Africa for nearly a decade, a period characterized by dramatic economic growth on the continent. Establishing links between such reform interventions and economic growth, however, is a complex problem. Although this note finds some connection between investment climate reform and economic growth, establishing more concrete evidence of causation will require greater focus at the country level, as well as on small and medium enterprises. This is where investment climate interventions generate change.Publication Small Business Tax Regimes(World Bank, Washington, DC, 2016-02)Simplified tax regimes for micro and small enterprises in developing countries are intended to facilitate voluntary tax compliance. However, survey evidence suggests that small business taxation based on simplified bookkeeping or turnover is sometimes perceived as too complex for microenterprises in countries with high illiteracy levels. Very simple fixed tax regimes not requiring any books or records tend to be overly popular but prone to abuse. System reforms will require more precise tailoring of the simplified regimes to their target beneficiaries, coupled with strong compliance management to detect and deter abuse. The overall objective of simplified taxation for micro and small enterprises (MSEs) in developing countries is generally to facilitate voluntary tax compliance and remove obstacles in moving toward business formalization and growth.Publication Contract Farming(World Bank, Washington, DC, 2014-10)Contract farming involves production by farmers under agreement with buyers for their outputs. This arrangement can help integrate small-scale farmers into modern agricultural value chains, providing them with inputs, technical assistance, and assured markets. Critics contend that contract partners may subject farmers to abuses. The literature shows that in fact contract farming can raise farm income, but mainly for high-value crops. It also indicates that in many cases firms are willing to work with small farms. This note confirms that conflicts are common between buyers and farmers, and that alternative dispute resolution methods may help resolve them.
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Fossil Fuel Subsidy and Pricing Policies(World Bank, Washington, DC, 2016-01)The steep decline in the world oil price in the last quarter of 2014 slashed fuel price subsidies. Several governments responded by announcing that they would remove subsidies for one or more fuels and move to market-based pricing with full cost recovery. Other governments took advantage of low world prices to increase taxes and other charges on fuels. However, the decision to move to cost recovery and market prices, ending budgetary support, has not been implemented consistently across countries. Policy announcements have varied in the way they were communicated and the level of detail provided. When petroleum product prices bounced back during the first half of 2015, some reforming governments failed to raise prices correspondingly. Recent experience suggests that regular and frequent price adjustments, however small—as in Jordan and Morocco—help the government and consumers to get accustomed to fluctuations in world fuel prices and exchange rates. By contrast, freezing prices, even for a few months—for socioeconomic considerations or because the needed adjustments are small enough to be absorbed—increases the risk of reversion to ad hoc pricing and price subsidies. The more formally the decision to move to market-based pricing is communicated, the more public new price announcements, and the higher the frequency of price changes, the more likely the implementation of the announced pricing policy reform will be sustained.Publication Gas Reform in Ukraine : Monopolies, Markets, and Corruption(World Bank, Washington, DC, 1998-12)Reform of the natural gas industry in Ukraine started a year later than reform of the power industry. Because gas reform had no blueprint, its direction has remained ambiguous. That ambiguity is the result of a conflict between those who advocate vertically integrated, opaque, monopolistic structures and those who want a transparent, competitive gas market governed by stable rules. This conflict will likely continue for several years, making the ultimate outcome difficult to predict. More by accident than by design, the reform produced a number of innovative features that might be of interest for other countries planning to restructure and privatize their gas industries.Publication Electricity Reform in Ukraine : The Impact of Weak Goverance and Budget Crises(World Bank, Washington, DC, 1998-12)Although reform of Ukraine's electricity sector is far from complete, the experience so far shows that ingrained attitudes are harder to change than written rules of the game. Moreover, the reemergence of old behavioral patterns during political, macroeconomic, or sectoral crises can quickly undermine early gains from reform. Thus the long time needed to achieve deep and irreversible changes places a high premium on stamina and patience for reformers. By contrast, and contrary to some predictions, in Ukraine it was relatively easy to put in place the basic systems for a functioning competitive electricity market. Dispatch center, generation, and distribution company employees quickly learned to work with the new procedures and demonstrated a remarkable ability to adapt imported solutions to local conditions.Publication Enhancing the Institutional Model for District Heating Regulation : Outside Perspectives and Suggestions(Washington, DC, 2012-12)Chapter one introduces the paper and briefly summarizes the main reform objectives and issues for District Heating (DH) in China. Chapter two presents relevant alternatives and lessons learned on approaches to regulatory practices in district heating internationally. Chapter three presents key findings and options for enhancing the institutional framework for DH regulation. Several Annexes complement the chapters by focusing especially on special topics raised by the MOHURD during this technical assistance activity. Annex one elaborates on chapter one, providing an overview of the current situation in China. Annex two introduces options for monitoring and benchmarking. Annex three discusses various methods for cost allocation of Combined Heat and Power (CHP). Annexes four, five, and six complements aspect of analysis on pricing and equity issues, a summary of options for competition among DH suppliers, and an example of red line impediments to energy efficiency innovation.Publication Toward a Low-Carbon Economy : Renewable Energy and Energy Efficiency Portfolio Review(Washington, DC, 2013)Renewable energy and energy efficiency projects continue to perform strongly in the World Bank Group (WBG) energy portfolio and are increasingly being mainstreamed in the WBG's energy lending. In fiscal 2007 a total of US$1,433 million supported 63 renewable energy and energy efficiency projects in 32 countries. In addition to operational activities, the WBG engages in a variety of economic sector work and technical assistance focused on renewable energy and energy efficiency. This work is an integral part of the WBG activities, which is valued as an important source of information and advice for policy makers and other stakeholders. In addition, these activities are an important component in the preparation of future lending activities. The Energy Sector Management Assistance Program (ESMAP) is a multi-donor trust-funded global technical assistance program that has reached its 25th anniversary. This program provides policy advice on sustainable energy development to governments of developing countries and economies in transition. The carbon finance project aims at promoting investments in wind energy to reduce greenhouse gas emissions, to contribute to the further development of the international carbon market in Mexico through the supply of emissions reductions under the clean development mechanism and to improve energy security.
Users also downloaded
Showing related downloaded files
Publication Classroom Assessment to Support Foundational Literacy(Washington, DC: World Bank, 2025-03-21)This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.Publication Argentina Country Climate and Development Report(World Bank, Washington, DC, 2022-11)The Argentina Country Climate and Development Report (CCDR) explores opportunities and identifies trade-offs for aligning Argentina’s growth and poverty reduction policies with its commitments on, and its ability to withstand, climate change. It assesses how the country can: reduce its vulnerability to climate shocks through targeted public and private investments and adequation of social protection. The report also shows how Argentina can seize the benefits of a global decarbonization path to sustain a more robust economic growth through further development of Argentina’s potential for renewable energy, energy efficiency actions, the lithium value chain, as well as climate-smart agriculture (and land use) options. Given Argentina’s context, this CCDR focuses on win-win policies and investments, which have large co-benefits or can contribute to raising the country’s growth while helping to adapt the economy, also considering how human capital actions can accompany a just transition.Publication World Development Report 2006(Washington, DC, 2005)This year’s Word Development Report (WDR), the twenty-eighth, looks at the role of equity in the development process. It defines equity in terms of two basic principles. The first is equal opportunities: that a person’s chances in life should be determined by his or her talents and efforts, rather than by pre-determined circumstances such as race, gender, social or family background. The second principle is the avoidance of extreme deprivation in outcomes, particularly in health, education and consumption levels. This principle thus includes the objective of poverty reduction. The report’s main message is that, in the long run, the pursuit of equity and the pursuit of economic prosperity are complementary. In addition to detailed chapters exploring these and related issues, the Report contains selected data from the World Development Indicators 2005‹an appendix of economic and social data for over 200 countries. This Report offers practical insights for policymakers, executives, scholars, and all those with an interest in economic development.Publication Business Ready 2024(Washington, DC: World Bank, 2024-10-03)Business Ready (B-READY) is a new World Bank Group corporate flagship report that evaluates the business and investment climate worldwide. It replaces and improves upon the Doing Business project. B-READY provides a comprehensive data set and description of the factors that strengthen the private sector, not only by advancing the interests of individual firms but also by elevating the interests of workers, consumers, potential new enterprises, and the natural environment. This 2024 report introduces a new analytical framework that benchmarks economies based on three pillars: Regulatory Framework, Public Services, and Operational Efficiency. The analysis centers on 10 topics essential for private sector development that correspond to various stages of the life cycle of a firm. The report also offers insights into three cross-cutting themes that are relevant for modern economies: digital adoption, environmental sustainability, and gender. B-READY draws on a robust data collection process that includes specially tailored expert questionnaires and firm-level surveys. The 2024 report, which covers 50 economies, serves as the first in a series that will expand in geographical coverage and refine its methodology over time, supporting reform advocacy, policy guidance, and further analysis and research.Publication Lebanon Economic Monitor, Fall 2022(Washington, DC, 2022-11)The economy continues to contract, albeit at a somewhat slower pace. Public finances improved in 2021, but only because spending collapsed faster than revenue generation. Testament to the continued atrophy of Lebanon’s economy, the Lebanese Pound continues to depreciate sharply. The sharp deterioration in the currency continues to drive surging inflation, in triple digits since July 2020, impacting the poor and vulnerable the most. An unprecedented institutional vacuum will likely further delay any agreement on crisis resolution and much needed reforms; this includes prior actions as part of the April 2022 International Monetary Fund (IMF) staff-level agreement (SLA). Divergent views among key stakeholders on how to distribute the financial losses remains the main bottleneck for reaching an agreement on a comprehensive reform agenda. Lebanon needs to urgently adopt a domestic, equitable, and comprehensive solution that is predicated on: (i) addressing upfront the balance sheet impairments, (ii) restoring liquidity, and (iii) adhering to sound global practices of bail-in solutions based on a hierarchy of creditors (starting with banks’ shareholders) that protects small depositors.