Greasing the Turbines? Corruption and access to electricity in Africa

Abstract

Using survey data from the Afrobarometer, we document that respondents who live in areas where more people report having paid a bribe to access household services are more likely to have access to electricity. The existing literature suggests three mechanisms that could explain why more corruption increases access to electricity. Corruption could incentivize firms to operate in the shadow economy and facilitate them doing so. Corruption could reduce enforcement of the law for electricity theft. Finally, corruption could lower firms’ costs by allowing them to reduce the burden of red tape and or ignore standards. The data do not support the first two of these mechanisms suggesting that corruption is “greasing the wheels” for firms in the electricity sector. Supporting this conclusion is the fact that this relationship between corruption and access is only statistically significant in countries where the ease of getting electricity is low and there is private participation in the electricity sector.