View article

More than half of the countries in the world have introduced a reform process in their power sectors since 1980s. Adapting a political economy perspective, this paper attempts to discover the impact of political economic variables on the liberalization process in electricity markets. Empirical models are developed using panel data from 55 developed and developing countries covering the period 1975-2010. The research findings clearly show that political variables have a significant impact on the reform progress. Consistent with public choice theory and economic theory of regulation, our results suggest that a portion of the differences in the reform experiences of reforming countries in the past three decades can be explained by differences in the relative strength of interest groups. We find that industry sector has a significant impact on the pace of power market liberalization process; and as its size gets larger, so …