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Policy considerations for limiting electricity theft in the developing countries

Author

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  • Jamil, Faisal
  • Ahmad, Eatzaz
Abstract
The study analyzed electricity theft through a three layered principal-agent-client model. The factors that entrench corruption and theft are its beneficial features of lowering the cost of electricity for the consumers and generating private illegal incomes for the corruptible employees. We show that an individual steals electricity only if the subjective pecuniary gains are higher than the associated costs e.g. fine imposed in case of detection or dismissal from job. The study finds that efficiency wages along with higher deterrence and active consumer involvement in reporting the crime can help in combating corruption and pilferage in electricity sector.

Suggested Citation

  • Jamil, Faisal & Ahmad, Eatzaz, 2019. "Policy considerations for limiting electricity theft in the developing countries," Energy Policy, Elsevier, vol. 129(C), pages 452-458.
    • Handle: RePEc:eee:enepol:v:129:y:2019:i:c:p:452-458
    DOI: 10.1016/j.enpol.2019.02.035
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