Publisher's Synopsis
The study investigates the performance of electric power and telecommunications sectors of Pakistan at the firm level as well as the sector as a whole, and identifies and attempts to quantify the extent of inefficiencies. Since physical or financial or productivity indicators alone are not able to explain the duality of public infrastructure purposes and the complexity of their multi-dimensional goals, a set of relevant physical, financial and productivity indicators has been used in evaluating the performance of these sectors. Further, a Cobb-Douglas production function has also been used to calculate the trend in the growth of total factor productivity (TFP). Economies of scale have also studied in the case of electric power generation. The results of the study show that in Pakistan one of the usual motives for privatization, to avoid the poor financial results of state enterprises, is not relevant for electricity and telecommunications enterprises. This however appears to be due to the financial subsidies they received through access to low cost loan and grants rather than to their efficiency in operations. By our economic criteria of growth of TFP none of the enterprises do well and two have a negative TFP growth. The case for reforming these sectors is strong however alternative modes of organization, finance and ownership need to be considered.
