Regulatory independence, service quality and performance of firms: Evidence from Sub-Saharan Africa

Regulations have been found to facilitate quality of service and energy access if properly designed and implemented. To test this hypothesis, the study analyzes the impact of independent regulation on the quality of electricity service in sub-Saharan Africa (SSA). In doing this, we use the double difference method on the data collected by the World Bank from 33,660 companies in 39 SSA countries. The findings show that the quality of regulation exercised by an efficient and responsible regulatory authority leads to better quality of service by companies and limits their economic losses. On the other hand, the results show that independent regulation in itself does not improve the quality of service. This implies that regulatory independence should be exercised with other strategies such as enforcement and effective stakeholder management to achieve better outcomes. JEL Classification: L51, L94, C22