Donor Policies, Industry Structure, and the Global Allocation of Electrification Aid, 1970-2001

Access to electricity is widely recognized as an essential element of economic development. This paper uses a comprehensive dataset on electrification aid projects to quantify and model the determinants of multilateral and bilateral electrification aid in the last three decades of the 20th century. Total annual electrification aid fluctuated substantially over the period. While multilateral and bilateral donors were relatively concentrated, aid recipients were widely dispersed. Our major finding is that electrification aid by the 1990s had moved marginally toward poorer countries, except for those in Africa, and toward countries with better governance structures and ones that had restructured their electric power sector. This likely reflected the liberalization and privatization policies affecting the industry from the mid-1980s on.