Preprint Article Version 1 Preserved in Portico This version is not peer-reviewed

Understanding Structural, Governance and Regulatory Incentives for Improved Utility Performance: The Case of Kenya and its Kenya Power

Version 1 : Received: 21 February 2022 / Approved: 22 February 2022 / Online: 22 February 2022 (11:02:29 CET)

How to cite: Twesigye, P. Understanding Structural, Governance and Regulatory Incentives for Improved Utility Performance: The Case of Kenya and its Kenya Power. Preprints 2022, 2022020269 (doi: 10.20944/preprints202202.0269.v1). Twesigye, P. Understanding Structural, Governance and Regulatory Incentives for Improved Utility Performance: The Case of Kenya and its Kenya Power. Preprints 2022, 2022020269 (doi: 10.20944/preprints202202.0269.v1).

Abstract

The power sectors in most African countries face an enduring problem of utility performance – electricity utilities have failed to deliver adequate, reliable and competitively priced electricity to support economic growth and improve the welfare of their populations. Despite more than two decades of power sector re-forms, outcomes have been varied and often disappointing. Using a case study de-sign, we explore the five key enduring power challenges. The research utilizes a more powerful analytical framework that combines power sector reform theory and principal-agent theoretical lens to explore the experience of power sector reforms in Kenya and provides a deeper understanding of drivers of utility performance and reform impacts. Empirical findings show that the structural, governance and regulatory reforms that previously created incentives for improved utility performance are increasingly threatened by political influence. Kenya Power’s financial viability has deteriorated in recent years and the regulator has been undermined. One of our major conclusions is that when the relationship between the principal (government) and agent (utility) is well understood and the agent is properly incentivized, performance improvements are possible. However, when the government undermines or muddies those incentives through conflicting political interventions, performance improvements can be reversed.

Keywords

Utility; Reforms; Governance; Regulation; Incentives; Agency; Liberalization; Performance

Subject

SOCIAL SCIENCES, Business and Administrative Sciences

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