The project investigates the relationship between tariff under-recovery and load shedding in developing counties. Industry experts hypothesize that there is a dangerous negative feedback loop between tariff under-recovery and load shedding when non-payment of bills necessitates load shedding which in its turn causes customers to use poor reliability as a pretence for not paying future bills, which leads to further load shedding. However, no research has tested for evidence of this feedback loop or investigated methods to mitigate such negative feedback effects. The researchers challenge this issue by conducting a comprehensive study to understand tariff under-recovery and load shedding affecting the Electricity Company of Ghana (ECG). They document the magnitude of tariff under-recovery and load shedding, investigate how non-payment is related to load shedding, and explore the benefits of low-cost information interventions to provide “nudges” for customers to pay their bills.
This work is part of the International Growth Centre’s ‘The Vicious Circle of Power Outages and Bill Payment: Evidence from Ghana’ project
James Dzansi, Steven L. Puller, Brittany Street, Belinda Yebuah-Dwamena (2018) The Vicious Circle of Blackouts and Revenue Collection in Developing Economies: Evidence from Ghana. IGC. Reference E-89457-GHA-1