While sufficient power generation capacity is necessary to meet the load requirements for commercial and domestic use, Pakistan’s power sector is constantly challenged by high electricity generation costs and inefficiencies in transmission and distribution. A new study by the Energy Policy Institute at the University of Chicago (EPIC) suggests that unpaid electric utilities in many developing countries including Pakistan have undermined efforts to improve access and reliability in the energy sector, contributing to widespread outages and rationing of power.
More than a billion people worldwide lack access to reliable electricity, despite multilateral efforts across the globe that have poured resources in to improving electricity access and reliability to spur economic growth.
Drawing upon micro data from poor, rural or small-town communities in Bihar, India, the study found that customers received on average about 17 hours of electricity a day in 2017. While some areas paid their full share, many paid a share of less than 20 percent and the average paid only 38 percent. Most strikingly, areas that paid more did not necessarily get more power electricity.
Combining this data with observations from several field experiments in countries like Brazil, Pakistan and South Korea, it was obvious that this severed link between payment and supply in Bihar, India was indicative of a broader trend in other developing countries. Research at the University of Chicago and partner institutes suggests that the root of the problem may lie in the fact that society too often views electricity as a right that does not need to be paid for.