Institutional Reforms, Governance Structures and Technology Adoption

This dissertation explores the interrelationship between technology adoption, institutions and governance structures, using the case of the electricity distribution sector in India. Improved technology adoption in this sector holds out great promise due to high electricity losses in supplying electricity and associated concerns regarding environmental sustainability. Meanwhile, reforms in the Indian power sector have changed the industry structure and established new governance structures – independent electricity regulatory commissions – which are entrusted to design and enforce provisions to improve the performance of the distribution sector. However, performance reviews have disclosed that, high distribution losses still continue to bear serious implications for the viability of the entire sector. Building upon the theories of New Institutional Economics, the study argues that the effectiveness of formal rules and their enforcement is shaped by path dependent political and social institutions which affect interactions among actors and are therefore locked-in to conventional technologies. This, in turn, has significant impacts on technology upgrading decisions. A new technology changes the physical environment, the characteristics of transactions and the interdependencies among actors, and hence necessitates a change of institutions and governance structures. The analysis of the functioning of the regulatory commissions and their role in the adoption of loss reduction technologies (LRT) reveal that regulatory incentives, as built-in multi-year tariff frameworks, do not seem pivotal to investments in LRT among utilities. The study argues that electricity distribution networks in India are complex sociotechnical systems that are highly influenced by political (informal)