The Transforming Power of Democracy: Regime Type and the Distribution of Electricity

Large literatures in economics and political science examine democracy’s impact on health, education, and other development indicators, but the political economy of electricity allocation has been ignored in previous work. Politicians determine electricity consumption patterns through state ownership and regulation (e.g. price subsidies). This study uses sectoral electricity consumption data for a panel of 750 country-years to examine democracy’s impact on the distribution of electricity across three sectors that represent distinct political interests: industry, agriculture, and residential consumers. We find that in poorer countries, democratization produces significant increases in the residential share of electricity at the expense of industry, suggesting sectors with less per-capita financial clout, but a stronger voice in elections benefit under democracy. Please Direct Correspondence to: Ahmed Mushfiq Mobarak Department of Economics UCB 256 University of Colorado, Boulder Boulder, CO 80309 Phone: 303-492-8872 Email: [email protected] This paper is available at: www.colorado.edu/Economics/courses/mobarak/Research.htm * We thank Terra McKinnish, Lee Alston, Elizabeth Kopits and Scott Savage for comments.