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The political economy of public utilities: A study of the power sector

Author

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  • K.P. Kannan

    (Centre for Development Studies)

  • N. Vijayamohanan Pillai

    (Centre for Development Studies)

Abstract

In this paper, we attempt at an analysis of the political economy of the Indian power sector with special reference to Kerala in the light of a generic model of the political economy of public utilities we develop in the first part of the paper. The model seeks to explain the political economy of the rent seeking drives in a non-Smithian imperfect regime of self-interest maximisation, with a regulatory structure of the public utility described in a framework of the principal-agent relationship. In contrast to the usual neo-classical monolithic representation of principal and agent, we characterise each entity in a Marxian-Kaleckian vein, as a composite set of conflicting sectional interests. This helps us develop a comprehensive perspective of the politico-economic implications of the relationship among the public, government and utility. Based on this generic model, we seek to analyse, in the second part of the paper, the political economy of the power sector in India, with emphasis on Kerala. We also attempt, wherever possible, to estimate the costs of corruption involved in the administration of the power sector.

Suggested Citation

  • K.P. Kannan & N. Vijayamohanan Pillai, 2001. "The political economy of public utilities: A study of the power sector," Centre for Development Studies, Trivendrum Working Papers 316, Centre for Development Studies, Trivendrum, India.
    • Handle: RePEc:ind:cdswpp:316
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    Cited by:

    1. K.P. Kannan & N. Vijayamohanan Pillai, 2004. "Development as a right to freedom: An interpretation of the 'Kerala Model'," Centre for Development Studies, Trivendrum Working Papers 361, Centre for Development Studies, Trivendrum, India.
    2. N. Vijayamohanan Pillai & K.P. Kannan, 2001. "Time and cost over-runs of the power projects in Kerala," Centre for Development Studies, Trivendrum Working Papers 320, Centre for Development Studies, Trivendrum, India.
    3. K.P. Kannan & N. Vijayaymohanan Pillai, 2002. "The aetiology of the inefficiency syndrome in the Indian power sector: Main issues and conclusions of a study," Centre for Development Studies, Trivendrum Working Papers 324, Centre for Development Studies, Trivendrum, India.
    4. N. Vijayamohanan Pillai, 2004. "CES function, generalised mean and human poverty index: Exploring some links," Centre for Development Studies, Trivendrum Working Papers 360, Centre for Development Studies, Trivendrum, India.

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    More about this item

    Keywords

    India; political economy; rent seeking; principal-agent; public utility; power sector;
    All these keywords.

    JEL classification:

    • E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian
    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • H4 - Public Economics - - Publicly Provided Goods
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • N4 - Economic History - - Government, War, Law, International Relations, and Regulation
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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