Current reforms: the politics of policy change in India's electricity sector.

India's electricity sector is undergoing a fundamental transition, one that echoes changes taking place in the country's labour, finance, trade and agricultural sectors. Once the near-exclusive purview of the state, electricity is now produced, distributed and traded to a greater extent by private actors.

This paper examines two moments of policy change in the Indian electricity sector. The first, following Independence in 1947, established public sector-led electrification. The second, beginning in the early 1990s, laid the groundwork for an increasing private presence in the sector. In both instances, policy change resulted from the confluence of prevailing economic ideology, held in India as well as globally, and the interests of India's dominant classes. Such an argument--emphasizing the importance of ideology as well as class or societal interests to explain reform--contrasts with other prominent theories of economic and institutional change. Some scholars of political economy contend that change is most often the result of economic crises that require breaking with old policies and giving elected leaders the latitude to change course. This is an oft-cited explanation for the origin of India's push toward neoliberal reform in 1991. (1) Others assert that it takes more than a crisis. Since those likely to suffer losses from potential reforms are typically better organized than those who will emerge as winners, only a dedicated cadre of bureaucrats and politicians can withstand opposition from social forces that stand to lose from reform, such as the beneficiaries of subsidies. (2) In the Indian news media, the tag "political will" to reform is often applied to the efforts of such a dedicated cadre.

The lacuna in both perspectives, however, is that while they can sometimes explain the timing of policy change, they fail to account for the types of reforms undertaken. For example, in the 1990s, why did policy makers focus on encouraging private involvement when they could have advocated management reforms in the State Electricity Boards (SEBs), a position that has vigorous supporters? These theories of change also tend to portray the state or state actors as isolated from the social forces amid which they operate, acting on autonomously derived impulses. In contrast to crisis theories or political will arguments, this paper situates the origins of the public sectorled strategy of the 1940s and 1950s, the subsidy regime of the 1970s, and the marketization strategy of the 1990s in shifts of interests among India's dominant groups. These interests are then vocalized within the frameworks of economic ideology that are available at different historical moments. (3)

This paper begins with a statistical snapshot of the electricity sector and its post-Independence expansion. It then lays out a political economy of the Indian electricity sector, in order to flesh out the broader argument. The succeeding section explores the creation of the state-run sector, especially its principal institutions--the SEBs--through an examination of their legislative history. The last section turns to the 1990s reforms, which I have broken up into three policy periods: independent power producers (IPPs); distribution reforms and regulatory mechanisms; and legislative reform auguring broad structural change in the sector.

The history of the electricity sector in India is rich and complex, and this paper cannot possibly do justice to all its facets. In particular, the paper only touches on the multiplicity of state experiments with electricity restructuring in the past decade. Instead, it retains a more macro perspective in order to illuminate the underlying forces that have shaped changes in Indian electricity, with a focus on the intertwining of interest group politics and global ideology.

Statistical profile of the Indian electricity sector

India's electricity sector has grown substantially since Independence. Installed capacity in 1950 was 1,713 megawatts (MW); by 2002 it had grown to 104,918 MW. However, per capita annual electricity consumption, which increased from approximately 13 kilowatt-hours (kWh) in 1951 to 365 kWh in 2001, remains low. For example, the figures for China and Brazil in 2001 were 893 kWh and 1845 kWh respectively. (4)

There is also urban-rural unevenness in the spread of electricity. According to the 2001 census of India, 56.5 percent of rural households and 12.4 percent of urban households lack access to electricity. (5) Although the number of electrified villages grew from 3,061 (0.54 percent) in 1951 to 587,258 (86 percent) by March 2001, the definition in use is limited, (6) as any village with a single connection to the grid currently counts as being electrified. (7) Patterns of electrification are also geographically uneven; nine states claim to have achieved 100 percent village electrification, while the bulk of unelectrified villages are located in the populous northern and central states. There is a similar unevenness in electrification across districts within many states.

The electricity sector has spawned a complex institutional structure. The Indian Constitution lists electricity as a concurrent subject, meaning that central and state governments share jurisdiction in the sector. While the central government is principally responsible for laws governing the sector, state governments are the main implementers. Consequently, electricity institutions exist at both state and central levels. Some were created by the Electricity (Supply) Act of 1948, such as the SEBs and the Central Electricity Authority (CEA), while others were added in later years. The SEBs are the main actors in the sector, accounting for the majority of generation and virtually all transmission and distribution. The CEA creates national-level supply and demand forecasts, and evaluates proposed power projects. The central government created the National Thermal Power Corporation (NTPC) and National Hydro Power Corporation (NHPC) in 1975 to provide additional generation, and became involved in transmission by forming Powergrid India in 1989. The ministries of power at both the state and central level formulate policy, and as the history below illustrates, the involvement of state governments has increased greatly over the years. The other significant actors in the electricity industry are the regulatory commissions at the central and state levels, which were formed starting in the late 1990s. The mandate of the state commissions is broadening with time, but their most important duty is setting tariffs for both public utilities and private companies.

Tables 1 and 2 provide more information about installed capacity and generation in terms of ownership and energy source. In addition to the main ownership types listed here, electricity departments, mostly in the smaller northeastern states, contribute small amounts of capacity and generation, largely from hydroelectricity.

The financial and technical performance of the SEBs has been deteriorating for several decades. This has been the main justification given by international organizations and the central government for urging the states to reform, restructure and privatize portions of the SEBs. Their average transmission and distribution (T & D) losses have increased from 22.2 percent in 1995-1996 to 29.9 percent in 2000-2001. The Planning Commission estimates that part of this increase is due to "more realistic estimates," which were possible after reforms in some states allowed for a better accounting of electricity theft. (8) The cost of supply per unit has also been increasing throughout the 1990s, from 1.08 rupee/kWh in 1990-1991 to 3.27 rupee/kWh in 2000-2001. Rising costs, coupled with a lack of commensurately increasing tariffs, also drive the declining financial performance of the SEBs. The average commercial losses of the SEBs have increased five-fold since the latter half of the 1990s, from 46,740 million rupees (roughly US$935 million) in 1996-1997 to 248,370 million rupees (roughly US$5 billion) in 2000-2001. (9) The losses of the SEBs account for over 25 percent of the states' gross fiscal deficits, which grew to 895,320 million rupees (roughly US$18 billion) that year. (10) The following section outlines an argument to explain this trajectory of decline.

Political economy of the Indian electricity sector

In 1948, the leaders of newly independent India undertook comprehensive electricity legislation as one of their first tasks toward building a new nation. At the time, international conventional wisdom held that electricity was a fundamental instrument of economic development and belonged in public hands. Indigenous Indian capitalists supported the idea of the state holding the "commanding heights" of the economy, investing in electricity and other essential manufacturing infrastructure. Anticipating independence in 1944, eight prominent industrialists formalized this position in the "Bombay Plan," which advocated state ownership of basic industries, including electricity. (11)

From the beginning, the sector faced a struggle in balancing the provision of electricity for industrial development--the promise on which the Bombay Plan was premised--and the promise of electricity to the masses to knit together a fissiparous and diverse nation. Until the early 1970s, this balance was tilted in favour of industry, as industrial tariffs were set significantly lower than for other consumers, quite contrary to the rhetoric of social transformation. With secure electoral positions, the Nehruvian Centre and its allies in the states could sustain this dissonance between rhetoric and reality better than governments in later decades. Populist subsidies were not an immediate political necessity, and the state could engage in development planning with a longer time horizon. (12) A further explanation is rooted in the political landscape at the time: rural interests were not yet as powerful as they later became, particularly at the state level.

As the influence of agricultural interests over legislative bodies eventually grew, policies were tailored to their benefit, mainly in the form of subsidies. The growth of rural power seeking to reorient development policies was reflected in the rise of regional political movements. (13) New parties arose to represent large-scale farmers and the local bourgeoisie, eventually challenging Congress party hegemony. (14) Over time, the Congress, which had ruled virtually unchallenged since Independence, lost its ability to craft compromises between capitalist and agrarian interests. Freed of central coordination, state governments yielded to the new political compulsions by introducing a regime of electricity and fertilizer subsidies for farmers. The Green Revolution drive for food self-sufficiency provided an additional, and more respectable, justification for a subsidy programme. While there is no doubt that electricity subsidies helped to establish India's self-sufficiency in food production, it is also true that they primarily benefited larger landowners. (15) The subsidy regime also benefited urban consumers, a less often mentioned beneficiary of state patronage, but a necessary constituency for political survival.

Industries were made to cross-subsidize support to farmers, which made the prevailing system fiscally unsustainable in the long term, as well as politically fraught because it disfavoured industrial interests. By the late 1980s, electricity subsidies had burgeoned, perceptions of corruption in the sector were rife, and the lack of investment in technology and management of transmission and distribution systems had contributed to rising theft and waste in a destructive downward spiral. In this context, the central government's shift in policy in the 1990s toward private sector and market approaches can be read as the outcome of a realignment of interests among the most powerful consumers of electricity in India, which coincided with a shift in globally and locally held economic ideologies.

The catalyst for opening up the sector to private investment in the 1990s was the perception that capital scarcity was the biggest obstacle to development. The emphasis on capital investment coincided with and was shaped by an emergent global ideology that the state should refrain from controlling resources that markets could more efficiently allocate. (16) Indeed, this retreat by the state was a precondition for investor confidence. This view held that the state should focus its resources on a limited category of social spending, mainly health and education. In the private-investment focused climate of the 1990s, electricity was outside the shrinking core of acceptable social spending by the state. This position had gained favour with a small but influential group of policy makers in India as well. The policy changes begun in the 1990s and culminating in the Electricity Act passed in 2003 opened the way for industrialists to invest first in electricity generation and distribution, and later to seek out low-cost power directly from private producers and sell their surplus captive power back to the grid. The new act promised the eventual end of subsidies to farmers and domestic consumers that had kept industrial tariffs high, but also a dramatic shrinking of the scope for using electricity as an instrument of development policy.

Thus far, a number of hurdles confront reforms to the sector. Again, these reflect the balances of social and political power within the Indian states separately, within the nation as a whole, and not least, shifts in the global ideology of liberalized electricity. Powerful rural interests have successfully checked attempts to eliminate electricity subsidies. Labour unions organized during forty years of public-sector electricity have worked to protect their interests since the mid-1990s. And globally, high-profile setbacks such as the electricity crisis in California have tarnished the ideology of privatized and marketized power.

The era of vertically integrated public monopoly utilities: 1948-1991

1948-1969: The consolidation and erosion of public power

In 1948, the framers of India's Constitution inherited a country with only 1713 MW of power and with about half a percent of its villages electrified. In response, they set out to create public institutions that would expand electricity generation and access. In goals and methods, they explicitly drew on international experience and prevailing wisdom. The models for the Indian approach came from the centralized investment allocation and five-year plans of the Soviet Union, the UK's nationalized electricity system, and the massive public works of the US Tennessee Valley Authority (TVA). India's private corporations were supportive of government plans to build large publicly-owned utilities and plants to produce needed inputs for manufacturing. (17) Enterprises like steel and electricity required enormous capital investment, long construction periods, and still longer time horizons to attain profitability, and thus business agreed that the state was the instrument of choice.

Prior to Independence, the Indian Electricity Act, 1903 (amended 1910), laid out the rules by which private firms were to be granted licenses by the state to supply power. India's electricity sector was composed of hundreds of private supply and distribution companies, located almost exclusively in cities and larger towns and the industrial regions surrounding them. While the majority of these were British owned, there were a few prominent Indian players, notably the Tata conglomerate. (18) As the cities and larger towns were becoming increasingly well lit from the 1910s to the 1940s, smaller towns and villages in between were largely untouched by this new technology.

The existing arrangements were equal neither to the task of lighting up India, nor to powering its industrial development. These were the goals of the Constituent Assembly when it sat down in August 1948 to forge a new electricity act. The stated objectives of the 1948 act were to reorient the sector to "provide for the rationalization of the production and supply of electricity, and generally for taking measures conducive to electrical development." (19) Through the act, the assembly members created public institutions--the Central Electricity Authority and SEBs--that became the nodal agencies in the sector. Although this legislation did not reserve electricity as an entirely public domain--a task accomplished by the Industrial Policy Resolution, 1956--it did set the stage for much broader government involvement in the sector.

The Constituent Assembly debate filled many days. The debate record is crowded with references to global ideologies and practices in the sector, underscoring the role of ideology in the creation of India's electricity institutions. Consistent with the thinking of the time, there was near-universal agreement that the state should become the primary actor in the sector. But there was less agreement about how quickly, to what extent, and in what manner the state should take control, and how to accommodate existing industrial interests in the sector.

In supporting nationalization, many members were concerned with overcoming existing patterns of electrification reflecting regional imbalances, a legacy of the diversity in development objectives and success among former princely states and colonial provinces. They contended that the state must involve itself in the sector until load centres emerged in rural areas and small towns, or until incomes rose sufficiently for rural citizens to afford electricity at its cost of supply. Providing electricity to these areas would be unprofitable, and no private entity would undertake the investment.

Many of those who advocated complete nationalization, which would have meant buying out all extant private power firms, argued that this was in keeping with accepted global practices. The legislative drafting committee, called the Select Committee, was aided by experts on loan from the British government, and individual members of the Constituent Assembly drew ideological succour from the UK and US for their arguments in favour of public sector-led growth in electricity. One member after another referred to British nationalization and Roosevelt's TVA, the latter as an explicit model for the Damodar Valley Corporation. One assembly member, Shibban Lal Saxena, from United Provinces, argued:

     ... we know that England has nationalized its electricity, coal and
     some other industries. In their Electricity Act they have provided
     for compensation to present manufacturers.... I do not think
     England today is abounding in wealth. She has to keep her life
     going today with the help of America and yet although the country
     is in such bad days she has taken over the key industries. I think
     India is much more solvent than England and she can afford to take
     over these concerns and pay compensation to the owners of the
     companies by spreading it over a number of years.... (20)

The nationalizers also argued vehemently that the records of private electricity companies demonstrated disregard for the role that electricity should play in advancing the social good. A. Ayyanger, a member from Madras Province, where 90 percent of generation and most of distribution had already been nationalized, spoke for many in his scathing portrayal of private power firms:

     But what these [private] corporations did was to take away the
     cream of income from the public and not contribute even a little or
     a farthing to the expansion of power to the rural areas....
     Corporations were easily established in towns [where] for lighting
     and other purposes they were charging at the rate of 4 annas per
     unit whereas under the terms of license they were obliged to supply
     power for agricultural and industrial purposes at the rate of 9
     pies per unit. Therefore, these Corporations always concentrated
     their efforts only in cities where on account of lighting they
     would get the largest portion of income, but they tried least to
     get into the villages and giving [sic] power to lift up water from
     wells and so on. (21)

Opponents of full nationalization argued that India did not yet have sufficient technological expertise and skilled manpower to fully take over the private sector. As another member from Madras, T.T. Krishnamachari, put it:

     There are powerful vested interests in one or two places which it
     would be very unwise for us to displace now. Take the Tata
     interests; it would be very unwise straightaway to displace it. It
     would be much better to get a corporation of that nature with its
     semi-impersonal character to help us in going ahead with our
     programme of developing electricity rather than tell them, "We are
     going to take you over", and find ourselves faced with all the
     difficulty that would ensue in regard to management and personnel.
     (22)

Ultimately, the legislation that was passed fell short of full nationalization and instead represented a compromise between the government and private operators. Nehru's need to reduce tensions between socialists and economic conservatives was also a likely factor in the compromise. (23) Existing private licenses were to be honoured, with state governments allowed to decide about license extensions when they expired. Subsequently, some state governments, such as Andhra Pradesh and Tamil Nadu, were quite aggressive in nationalizing the sector fully while others, such as Maharashtra, continued to extend the license period of private operators for decades, including into the current period.

Despite the explicit recognition that the state would have to bear the costs of electrifying smaller towns and villages, the legislation did not include an overt directive to this effect. Instead, the 1948 act mandates that the boards must arrange for "the supply of electricity ... and for the transmission and distribution of the same in the most efficient and economical manner with particular reference to those areas which are not for the time being supplied or adequately supplied with electricity." (24) However, the exact manner in which this was to be accomplished--the speed and method of finance--was left to the discretion of individual states. Accordingly, there was a wide variation in the way the states undertook the task of rural electrification over the ensuing decades. (25)

A second issue that emerged during the assembly debate was SEB autonomy, a discussion that in many ways anticipated contemporary debates about the electricity sector. Those who were concerned about the uneasy relationship between the SEBs and the state governments sound much like contemporary critics of the SEBs. In some regions, like Madras and Mysore (now Tamil Nadu and Karnataka respectively), the state governments were already the primary owners in the sector. Electricity had become a powerful tool to control resource-allocation and to generate revenues. Representatives from these regions therefore opposed the creation of SEBs, insisting that the same work could be done more efficiently within a department of the state executive branch.

Supporters of SEBs anticipated the problems of increasing interference by elected leaders, presciently envisioning a time when electricity would come to be a tool wielded to fashion and sustain political constituencies. These members argued that the SEBs should be given full autonomy. The words of K. Santhanam from Madras Presidency, who was also a member of the Select Committee, exemplify this sentiment:

    What are [sic] the British Government doing?... Then again even in
    America when they wanted to start a national undertaking they
    established a Tennessee Valley Authority. These democratic
    governments knew what nationalization meant; they knew that these
    industrial undertakings should not be left to the vagaries of
    ministerial change.... Ministers may change, and changing Ministers
    may have changing policies; but the day to day administration of
    industrial undertakings should be continuous and should not be
    disturbed by political considerations. (26)

Again, an uneasy balance was struck to pacify two opposing camps. The legislation mandated that all of the states would eventually create autonomous corporations, but allowed states sufficient time--initially two years from the passage of the 1948 act, but with the explicit promise of further extensions if they proved necessary--to establish these bodies. (27) All the states took full advantage of this provision, and many waited to establish their boards until the late 1950s and early 1960s. Given the regional differences within the still unstable union, this kind of compromise was necessary to garner sufficient support to enact the bill into law.

Over time, successive amendments to the act further eroded SEB autonomy by gradually diminishing the boards' freedom to set tariffs and by imposing greater political oversight in personnel decisions. An amendment in 1949 permitted the states to appoint their own chief engineers and other members of the government to become chairmen and members of the SEBs, which collapsed the interests of the boards and the state governments. A 1956 amendment added a vaguely worded provision that the SEBs would take "policy directives" from the state government. (28) The same amendment also retracted the SEBs' ability to set tariff levels independently; instead the boards would have to secure government approval. This was driven by dissatisfaction with existing tariff levels. Tariffs for agricultural consumers reflected the higher costs of serving remote rural areas, whereas industrial consumers were charged relatively less to reflect the lower cost of serving consumers who were concentrated geographically and consumed in large quantities. By subjecting the tariff-setting process to state government approval, conditions were created for departing from narrow economic rationality. Whatever else might be said for it, this opened the door for electoral considerations to influence the tariff-setting process.

1970s and 1980s: states' populism and creeping centralization

Decreasing bureaucratic autonomy and increasing scope for political control over SEBs ultimately led to financial crises in the sector. As discussed earlier, the emergence of powerful new farmers' organizations in the 1960s and 1970s and associated political formations within the Indian states were an important contributing factor. They demanded increased support for agricultural inputs, particularly irrigation and fertilizer. (29) Beginning in the late 1970s, state after state responded by subsidizing electricity, a policy that was also justified because it paralleled subsidies given to farmers who used canal irrigation. (30) Over this period, many states also switched from metering agricultural consumption to flat-rate billing. The lack of metering allowed SEBs to hide transmission and distribution losses and theft of power under the category of agricultural consumption. To offset the losses from lower tariffs for agriculturalists and concealed theft, SEBs gradually began charging higher rates for industrialists, resulting in a system of cross-subsidies. Eventually this led in the 1980s and 1990s to many industrialists eschewing high-cost power from the state grids in favour of in-house captive generation, leaving the SEBs with fewer financially valuable customers.

India's self-sufficiency in food production, as well as other compelling (if difficult to quantify) social equity gains, are oft-cited and also oft-debated benefits of the subsidy policy. Yet whatever their ultimate merits, the absence of clear oversight and of strict financial guidelines for subsidy delivery placed increasing financial strain on the SEBs. Moreover, agricultural subsidies had the political effect of strengthening rural interests within the states, which in turn made the subsidy regime difficult to reverse.

The performance of the SEBs also deteriorated due to corruption. (31) The management of the SEBs was subject to political interference that ranged from personnel decisions to the awarding of contracts for construction and manufacturing in the sector. Selective granting of contracts proved profitable for politicians eager to swell their campaign coffers. (32) As the financial position of the SEBs worsened, the utilities were less able to add generating capacity and maintain transmission and distribution networks, resulting in technical deterioration and lost efficiency. State finances were caught up in the downward spiral, as state governments were ultimately responsible for the financial health of SEBs. (33)

A significant consequence of the ailments plaguing the SEBs was their inability to generate capital. Beginning in the late 1960s, the central government responded to the problem of capital scarcity by creating central institutions, first to finance state organizations and later to independently build new capacity. In 1969 the central government established the Rural Electrification Corporation with World Bank aid to finance transmission extensions. In the mid-1970s the central government, again with World Bank assistance, established the NTPC and the NHPC to expand electricity generation. The development of the NTPC in particular had far-reaching implications, shifting the balance of power towards the centre in a sector the states had previously dominated alone.

Although central government intervention staved off capacity shortages in the short term, electricity was increasingly a constraint on economic growth. By the end of the 1980s, industry was increasingly dissatisfied with low-quality power, high tariffs, and restrictions on private production. However, it took a seismic change in global thinking on electricity to topple the consensus on public power and set in motion fundamental changes in the sector.

Liberalization in the 1990s

The second significant historical moment in the Indian electricity sector occurred in the 1990s. In the face of managerial and fiscal failures in the sector, industry dissatisfaction, and a national macroeconomic crisis, the central government announced in 1991 that it would encourage private investment in power. Over the following decade, state and central governments began to re-organize the sector around the market, encouraged by a new global electricity paradigm that favoured private ownership and competition over publicly-owned monopolies. India's reforms proceeded in three stages: in the first, the government encouraged private investment in generation; in the second, a response to the inadequacies of the first, it encouraged privatization in distribution and the formation of regulatory commissions; in the third, the Electricity Act of 2003 re-wrote the basic laws and reshaped the institutional infrastructure governing the sector.

Phase One of Reforms: Independent Power Producers

In 1991, while battling a balance of payments crisis, the central government amended the Electricity (Supply) Act of 1948 to make the sector more attractive for private investment. Introducing the Lok Sabha debates, Minister of State Kalp Nath Rai argued that the amendment was necessitated by a paralyzing scarcity of financing for the sector. This argument was echoed by both enthusiastic and reluctant supporters. Remarkably, the concerns that were so passionately argued in 1948--regional balance, urban-rural balance and the broader public interest--were almost entirely absent. Even the left opposition ignored broader issues in favour of a focus on labour. In 1991, the concerns of policy makers with regard to electricity were far removed from those in 1948; the idea of electricity as an instrument of social development no longer aroused political passions.

That the electricity debate took place under the shadow of a severe macroeconomic crisis is one reason that the 1991 reforms went largely unchallenged. Also important, however, is the broader context. Influenced by the Reagan-Thatcher 1980s, economists and policy makers in India questioned Nehru-era policies of centralization and state ownership. Industrialists no longer supported government control of the commanding heights, and embraced the new ideology of reduced state involvement in the sector, which offered industry a way to expand electricity supply options and extricate itself from the financial drain of cross-subsidies. State governments also came to favour increased private investment. Leaders began to understand that sector finance and supply shortages threatened development in their regions. By the early 1990s, most SEBs were locked into providing highly subsidized electricity to agricultural and residential consumers, and most were prevented by state governments from increasing tariffs to match increases in production costs. While the price of coal and the cost of transporting it to generating stations increased, SEB revenues remained unchanged. As a result, power utilities were increasingly unable to pay their bills. Because coal and railways belonged to the central government, their inability to collect payments from SEBs became a source of tension between the centre and the states, and a reason for the centre to demand a change in the status quo. The states also came under pressure from international financial institutions, which demanded reforms in the SEBs before granting new loans. (34) The twin pressures from the central government and international lenders led state governments to welcome the private sector.

In addition, the inadequacy of power sector data contributed to the momentum for private generation. Transmission and distribution (T & D) losses by SEBs--including theft--were consistently under-reported, while agricultural consumption was inflated. In reality, inadequate metering of farmers permitted misreporting of theft as agricultural consumption. This erroneous reporting contributed to the view that the main problem of the Indian power sector was inadequate supply rather than mismanagement, theft and corruption. Since the early 1990s, one SEB after another has upwardly revised their figures for T & D losses, suggesting that capacity addition alone could never have solved the sector's difficulties. (35) At the time, however, there was a near consensus that power deficit was the main problem, spurring the IPP policy.

While all of these forces were operating to advance the government's 1991 reform amendment, there were few countervailing pressures opposing the amendment. In the early 1990s, there was not yet a broad-based opposition to neoliberal reform, and following on the heels of the economic crisis of mid-1991, the public was prepared to support policy changes that would avoid future crises. Although the public utilities constitute one of India's largest employers, labour unions in the sector had not yet organized effectively to oppose privatization. (36) Indeed, the IPP policy was not initially perceived to threaten labour or public utilities, so there was not a strong incentive for labour opposition. Similarly, there was no broad agitation from farmers against the reforms because the IPP policy was not discussed in the context of eliminating subsidies, which continued and even expanded throughout the 1990s.

Taken together, macroeconomic crisis, political and economic pressures on the states, flawed data that highlighted generation scarcity, and the lack of organized opposition explain the rapid passage of the 1991 amendment. The incentives to private power investors were substantial. The initial licensing period for private generators was extended from 20 to 30 years, and the subsequent renewal period was increased from 10 to 20 years. Similarly, the rate of return on capital investments, formerly set at two percent over the Reserve Bank of India rate, was increased to five percent on all investments made after the legislation came into effect. Foreign equity participation was liberalized, and an expedited single-stop approval process was created to replace the multi-ministry approval process of the past. (37)

After the 1991 amendment was passed, private firms rushed to sign Memoranda of Understanding (MOUs) with central and state governments. In 1992, the central government assigned eight IPP projects "fast-track clearance," which allowed these projects to leap over licensing hurdles in order to expeditiously address the capacity shortage. In just five years time, by 1996, the government had received 190 proposals from IPPs, which, if completed, would have produced over 75,000 MW of electricity. Of these, only 15 went on to the stage of applying for a techno-economic clearance from the Central Electricity Authority. (38) MOUs were signed for plant construction all over the country. Of these, the largest, most capital-intensive, and the one that would have resulted in the highest-cost power was signed by Enron and the Maharashtra State Electricity Board (MSEB) in 1992 to construct a gas-fired 2,000 MW power plant in Dabhol, in coastal Maharashtra.

From the start, the wisdom of Enron's Dabhol project had been widely questioned. Both state governments and the Enron corporation were accused of acting with a lack of transparency and regard for the public interest. (39) A range of actors from the CEA to the World Bank to activists questioned the economics of the project, pointing out that the high projected cost of power and the dollar denomination of the contract would expose the power purchaser, the Maharashtra SEB, to financial risk. (40) Activists and agrarian communities also protested the environmental and social costs of the project, including inadequate compensation to farmers and potential human rights abuses associated with project construction. (41) The project has also become a central issue in state politics, with two Hindu nationalist parties campaigning on an anti-Enron plank, only to first cancel the contract when they came to power, and then quickly re-negotiate it. Ultimately, fears that the Dabhol project would be financially unsustainable proved true. With state and central governments refusing to honour their financial guarantees of payment, the plant has been idle since 2001, and embroiled in a bitter dispute between the various parties.

Phase Two of Reforms: Distribution Privatization and Independent Regulation

By the mid-1990s it was clear that a focus on private investment in generation was an insufficient, and possibly counterproductive, policy. Not all PPAs were controversial, nor did all fail as spectacularly as Enron's did. Nevertheless, the saga of Enron in Dabhol, ending as it did in a high-profile contractual dispute, clearly demonstrated the difficulties with expecting IPPs to solve the sector's problems. As long as private generating firms had to sell their power to insolvent SEBs, financial risks would remain intolerably high. The second phase of reforms thus sought to address the problem of political interference with the SEBs, which kept subsidies too high and collections too low for SEBs to pay their bills.

The first solution proposed was to privatize electricity distribution, and the second was to establish regulatory institutions. These mechanisms were intended to alter the relationship of the state utilities to consumers, and of state governments to utilities. Their intent was to remove electoral considerations from electricity governance.

These reforms were quite clearly drawn from the playbook of the World Bank, which, in 1993, had rewritten its policy to emphasize private participation in the power sector. Its global reach and cheap capital made the World Bank the primary vehicle for propagating the new private power paradigm, in India as elsewhere. In the second half of the 1990s, various Indian states experimented with distribution privatization and regulation. While some states fully privatized distribution, others have only recently unbundled their SEBs. In large measure, these differences reflect variations in the balance of power among different social and economic actors in the states. While a detailed overview is beyond the scope and purpose of this paper, it is worth considering briefly some state-level examples. (42)

The first state to undertake distribution privatization was Orissa, which seems on the surface an unlikely locale. The state lies along India's eastern coast, and is most often mentioned in the international media as the site of tropical storms that have devastating effects on its economy and infrastructure. Furthermore, it has one of the lowest per capita GDPs in India. Other factors, however, favoured Orissa as a site for privatization, chief among which were the small size and organizational weakness of its agricultural sector.

Orissa unbundled the state SEB in 1996, and later privatized the four resultant distribution zones. Private entities were expected to lower the transmission and distribution losses, increase management efficiencies, and make capital investments to improve the technical performance of the sector. According to an official Government of Orissa appraisal committee report, the vision for the reforms emanated entirely from the World Bank and depended on World Bank loans for project support. (43) Additionally, the reforms were executed with the aid of consulting firms--most of them foreign--paid using bilateral and multilateral funds. When the state initially invited bidders for 51 percent equity stake in the four distribution zones, only a single Indian firm--Brihanmumbai Suburban Electric Supply (BSES)--qualified to purchase the assets. Another firm, US-based AES, already had a generation presence in Orissa, and was persuaded by the Orissa government to bid for one distribution zone as well. (44)

There is now a widespread consensus that privatization in Orissa was a failure, although the causes of failure are fiercely disputed. Proponents of privatization argue that the government continued to interfere in the functioning of the sector, preventing the private firms from eliminating electricity theft in order to avoid electoral repercussions. (45) In its own review, the World Bank concludes that "reform in Orissa has shown that privatizing distribution through the sale of assets is a feasible option in India," but suggests the need for modifications in approach. (46) These include expanding the size of the distribution zones to ensure financial viability; extending the tariff-setting process from an annual basis to every five years; and cultivating more transparent regulation and possibly mandating that regulators consider the financial health of the regulated companies. Opponents of privatization argue that the private firms, wholly concerned with profits, failed to make capital investments to improve the technical efficiency of the sector, and were shielded from being forced to reduce theft because of the nature of their contracts. Citing information provided in the official appraisal report, some have charged that the bulk of the funds meant for reforms went into the pockets of international consultants, who were the only real winners in the reform process. (47)

Whatever the causes of Orissa's failure, there is little doubt that the experiment has left the state's electricity sector in a shambles. The state transmission company is in dire financial straits, hoped-for improvements in service have yet to materialize, and one private investor, AES, has abandoned the experiment altogether. (48)

The only other state to successfully privatize distribution is the capital territory of Delhi, which did so in July 2002. Delhi's Electricity Board was unbundled into three distribution zones, two of which were bought by Reliance Energy (then BSES) and one by Tata Power Company, parts of two of India's largest industrial conglomerates. Reliance in particular is expanding its presence in the energy sector. However, there is fear that if these are the only two Indian companies able to purchase the large distribution segments that result from unbundling, these firms will have undue control over the sector.

The second strategy employed to "depoliticize" the sector was to create autonomous institutions to regulate tariffs. The Central Government passed the Electricity Regulatory Commissions Act in 1998. Several states had preempted the central government in creating State Electricity Regulatory Commissions (SERCs), the first being Orissa. The differences in the legal frameworks governing the various SERCs are minimal, but their operations vary from state to state, in some cases including activities such as plant licensing. While restructuring and privatization have proceeded slowly, and only in a handful of states, almost all states have now established a regulatory commission.

The main criticisms of the new regulatory regimes have focused on their relationship to elected leaders, which some consider far too cozy. (49) The regulators themselves are chosen from among retired or nearly retired bureaucrats, many of whom naturally have pre-existing relationships with government from having served in other bureaucratic capacities. Additionally, some state governments have not granted sufficient financial resources to the commissions, prompting the worry that governments will use this leverage over finances to exact politically convenient decisions.

Still others are cautious in holding up regulatory commissions as the solution to the industry's ills because of the possibility of regulatory capture by private companies and utilities. (50) Theoretically, independent regulators are charged with establishing tariffs that balance the competing interests of private companies, utilities, consumer groups and the public interest. In theory, each of these groups is able to represent its interests before the regulator. In practice, however, private companies and public utilities are better able to organize to represent their interests than are consumers. Moreover, there are considerable inter-state differences in how regulatory commissions function. The sole comprehensive study on the performance of regulatory institutions in India indicates variations in the level of resources and autonomy granted to the SERCs; the degree of transparency and public participation in the regulatory process; regularity in publishing annual reports and holding consultative committee meetings; and the nature of state government and utility interaction with the regulators. (51)

The potential but also the challenge of effective regulation is illustrated by an example from Maharashtra. The first task of the Maharashtra Electricity Regulatory Commission (MERC) was to evaluate the merits of a tariff increase proposed by the MSEB. The MSEB requested that tariffs be increased by almost 10 percent to enable the board to earn a surplus of 4.5 percent of the value of its fixed assets. (52) The public was then invited to submit comments on the MSEB's proposal, a document of about 40 pages. Prayas, an NGO that has been active in energy issues in India, immediately requested that the MSEB supply additional information to justify the tariff increase, and to detail its other revenue-enhancement measures. MERC ruled that Prayas had the right to make such a request, and ordered the MSEB to provide additional information. (53)

This anecdote suggests that the presence or absence of competent and organized consumer groups is a key variable in determining the success of regulation. (54) This point is often lost amidst the chorus from policy makers, donors and bureaucrats in Delhi on the importance of financial and managerial autonomy for regulatory commissions and the associated freedom from political interference. While regulation does create conditions for greater transparency and accountability in tariff setting, in order for the process to work in the public or consumer interest, they must be adequately represented. Ironically, Maharashtra is in the forefront of consumer advocacy in power because Prayas and several other groups were galvanized into action by the Enron controversy. In the absence of such groups, it is unclear whether MERC would be an equally effective instrument to promote the public interest.

Phase Three of Reforms: Electricity Bill 2003

While state reforms have scarcely been a runaway success, they did have the merit of attempting to focus on the central problems at hand, namely, distribution reform and SEB losses, albeit with far from satisfactory outcomes. With distribution reform firmly on the agenda, the central government reentered the fray with an attempt to replace ad hoc state efforts with an overarching framework to guide reform. Thus, in contrast to World Bank-led state reforms, the Electricity Act 2003 represented the internalization of the new global ideology of electricity at the highest levels of India's central government. The new legislation, passed in May 2003, replaces all existing legislation in the sector and prepares the ground for a fundamental restructuring of the Indian electricity sector. The intent is to deepen and formalize the transition that is already underway in some Indian states. Critics of the legislation charge that the act, by focusing on private participation, establishes the conditions for electricity to be managed solely as a commodity rather than as a social good that the state is obligated to provide to its citizens. Many expect the result to be a return to the pre-Independence conditions that had originally spurred the creation of SEBs, when electricity flowed primarily to cities, areas with concentrated loads and robust purchasing power. (55)

The Ministry of Power submitted a draft of the Electricity Bill to the Parliamentary Standing Committee on Energy in August 2001, a bi-chamber, all-party committee that debated the bill for 15 months. A number of changes were suggested to strengthen competition. For example, the revised legislation stipulated a firm timeline for the implementation of open access, meaning the ability of industry to buy power directly from private generators. After being passed by the committee, with notes of dissent from the Communist parties, the bill returned to the Ministry of Power in December 2002. The ministry accepted only some of the Parliamentary Committee's suggested changes. Notably, a timeline for the introduction of open access was again omitted in the bill. The new version of the bill was passed by the Indian Parliament in May 2003. In contrast to the debate on the 1948 Electricity Act five decades earlier, the debate in the Lower House was brief--just over an hour--and sparsely attended.

The scope of the act is wide, with implications for the structure, functioning and regulation of the sector. First, while retaining transmission functions in government-owned companies, it allows for open access in transmission and the phase-in of open access in distribution, along with scope for power trading. Open access, which would open the door to industrial flight from public power, is undoubtedly the most controversial provision of the act, as evidenced by the repeated insertion and deletion of a timeline for this measure. Second, to complete the agenda begun in 1991, the new act eliminates licensing requirements for generation, including captive generation by industries. Third, it introduces a series of measures to address the management and finances of distribution utilities. Specifically, the act introduced mandatory metering and stringent provisions against electricity theft, together with a requirement that subsidies must explicitly be paid for out of state budgets. Fourth, the act decentralizes responsibility for rural electrification to local bodies, non-governmental organizations, cooperative societies and private licensees. It calls for universal electrification to be completed, but contains few specifics regarding how this is to be accomplished. Fifth, the act introduced various consumer protection measures, notably the creation of an Appellate Tribunal to hear cases appealed from the state or central regulatory commissions, and established an ombudsman's office to hear consumer grievances.

The basic thrust of the act is to open the sector to private involvement and scale back the role of state governments. But for many, the act does not do this fast enough or with sufficient certainty; the legislation is said to harbour an incumbency bias that protects the interests of existing utilities at the expense of consumers. In an editorial on the Electricity Act 2003, one of its early drafters, who had pushed unsuccessfully for including strict guidelines for the introduction of competition in distribution, argues that "delay in introducing open access means delaying competition and private investment. Shortages will continue and consumers will have to rely on the public sector, which does not have the resources for meeting the entire demand. This seems a sure recipe for power shortages and high tariffs." (56)

Another reading of the legislation is that numerous revisions have resulted in the inclusion of contradictory policy principles. As one news article states, the act "incorporates viewpoints, ideas, concepts, constraints and requirements from a wide range of interested parties and has thereby undergone a number of changes." (57) The resolution of these contradictions will require several additional policy directives. For example, the act mandates a gradual reduction in cross-subsidies, which will entail dramatic tariff increases for rural and residential consumers. Such a move would not only have electoral consequences, but it is also not clear whether poor Indian consumers, particularly from rural areas, can afford cost-of-supply tariffs. The act also stipulates that whatever subsidies the states want to grant must come in a direct form, through a transparent payment to whichever utility is serving those customers. However, since the early 1990s, and accelerating in the mid-1990s, the states' fiscal resources have come under greater strain. A direct subsidy might be possible in wealthier states, but for the majority of middle- and low-income states--the ones with the greatest number of middle- and low-income consumers--this is not feasible.

In sum, the act no doubt represents a concerted effort to address the core issue of the distribution sector and its mismanagement, subsidy and metering problems. It also makes efforts to address broader public concerns, such as rural electrification and consumer protection. However, the zero-sum trade-off between the core provision of open access, subsidies to agricultural and urban consumers, and the fiscal burden on the states will almost certainly bring political tensions into sharp focus.

Conclusion

Shifts in India's electricity policy in the 1950s and 1990s can usefully be understood as the result of both interests and ideology. In the 1950s, India's industrialists supported public control of the sector, a position that was buttressed by unchallenged global norms of state-led development. At the time, low tariffs for industry reflected the lower marginal cost of supplying large urban customers, and India's large-scale farmers were not yet sufficiently organized or politically represented to pose a challenge. Moreover, the country was governed by a single dominant political party, in which disparate interests were negotiated internally rather than on the electoral battlefield.

By the 1970s, India's rural elite was better organized, and regional parties had emerged to represent these new interests. Agricultural subsidies were adopted to increase India's food supply after successive years of drought and under-production. Gradually, industrial tariffs rose relative to those for other consumers, and given the growing political importance of farmers in many states, industry had little room for negotiation with state governments.

By the late 1980s and early 1990s, a new global ideology that emphasized private over state ownership provided a ready vehicle for industrialists to articulate dissatisfaction with the high cost and poor quality of electricity. Many industries were producing their own power and sought to sell the excess back to the SEBs. After several state-level experiments, demands for a fundamental shift in electricity policy were satisfied by the passage of the Electricity Act 2003, which mandates significant institutional changes, like the dismantling of the SEBs and the introduction of competition in distribution. However, many state governments have been reluctant to adopt policies that would be politically damaging, particularly with respect to tariffs.

Differences have already started to emerge among India's states in terms of how, and how fast, marketization will take hold. The utilities look increasingly likely to be caught in the middle of competitive pressures from the private sector and political pressures to maintain populist rates. For the last several years, state after state has pledged to raise agricultural tariffs only to later renege, either because a new party, having made electoral promises of free power, has come to govern, or because the party in office is trying to satisfy its electoral base before elections. In the aftermath of the defeat of the incumbent party during national elections in mid-2004, three politically significant states--Andhra Pradesh, Tamil Nadu and Maharashtra--announced a policy of free power to farmers, signalling that for many, the political cost of rolling back agricultural subsidies is too high to bear.

At the same time, only months after the Electricity Act 2003 was passed, private companies began submitting proposals to participate in electricity distribution in selected urban zones, where profits are likely to be high and operating costs low. In Maharashtra, for example, Reliance Energy (formerly the BSES), submitted a proposal to the regulator to utilize the open access provisions of the act to operate in five distribution zones in the state, which together comprise 75 percent of the state utility's monthly revenues. (58) Meanwhile, the people most severely affected by the fiscal and operational crises in the electricity sector continue to be the 40 percent of Indians who remain off-grid. Their interests may not be served either by a continuation of the status quo or by selective distribution privatization.

The difficulties of finding viable solutions to the sector's problems are underscored by the waning interest among foreign companies to invest in the electricity industries of developing countries. There are also cracks in the international coalition that supports restructuring and privatization. The electricity crisis in California, the collapse of the Enron corporation, and repeated redesigns in countries that pioneered electricity reform, such as the UK, have raised significant questions about the effectiveness and broad applicability of power markets. (59) In a programme evaluation of energy sector lending, the World Bank has recognized that the poor are often the last to benefit, if at all, which demands a re-thinking of the sequencing and substance of the reforms that the bank has been actively promoting for the last decade. (60) This more muddled global situation leaves far less scope for domestic actors to invoke a global consensus in support of local political interests.

In this context, the tussle for India's electricity future is likely to occur more squarely in the national arena in the years to come. The Electricity Act, while signalling a desired direction, provides scope for a range of possible outcomes at the state level. Without recourse to a unifying global narrative, the centripetal effect of local politics will likely become determinative, and India will witness a range of different state-level experiments with electricity. This may not be a bad thing. Deprived of the cloak of global ideology, decision making on electricity in India could become a more honest and realistic process.

Table 1. India's Installed Capacity (MW), March 2002

                                       Fuel type
Ownership type           Hydro     Fossil    Wind     Nuclear  Total

State electricity        22,636    39,546       62    --        62,244
  boards (SEBs)          (86%)     (53%)     (4%)
Central public sector     3,049    25,837    --       2,720     31,606
  enterprises            (12%)     (35%)
Private sector              576     9,046    1,445    --        11,067
                         (2%)      (12%)     (96%)
Total                    26,261    74,429    1,507    2,720    104,917
% of installed capacity
  by energy source           25%       71%       1%       3%       100%

Source: Government of India, Planning Commission, Annual Report (2001-
2002) on the Working of State Electricity Boards and Electricity
Departments (New Delhi: Planning Commission, 2002). Figures in
parentheses represent the contribution of each ownership type to
capacity, by energy source.

Table 2. India's Gross Generation (million kWh), 2000-2001

                                     Fuel type
Ownership type         Hydro     Fossil     Nuclear   Total

SEBs                   52,669    212,230    --        264,899
                       (82%)     (52%)                (54%)
Central PSUs            9,952    159,617    16,928    186,497
                       (16%)     (39%)      (100%)    (38%)
Private sector          1,302     35,817    --         37,119
                       (2%)      (9%)                 (8%)
Total                  63,923    407,664    16,928    488,515
% of gross generation
  by energy source         13%        83%        3%       100%

Source: Government of India, Planning Commission, Annual Report (2001-
2002) on the Working of State Electricity Boards and Electricity
Departments (New Delhi: Planning Commission, 2002). Figures in
parentheses represent the contribution of each ownership type to gross
generation, by energy source.

1 Jagdish Bhagwati, India in Transition: Freeing the Economy (Oxford: Clarendon Press, 1993); Bimal Jalan, India's Economic Crisis (New Delhi: Oxford University Press, 1991).

2 John Waterbury, Exposed to Innumerable Delusions: Public Enterprise and State Power in Egypt, India, Mexico, and Turkey (Cambridge: Cambridge University Press, 1993); Arnold C. Harberger, "Secrets of Success: A Handful of Heroes," The American Economic Review, vol. 83, no. 2 (1993), pp. 343-350.

3 A growing number of political economists are developing theories for institutional change which take seriously both underlying social and economic forces and the influence of ideas or ideology. For a US example, see Mark Blythe, Great Transformations: Economic Ideas and Institutional Change in the Twentieth Century (Cambridge: Cambridge University Press, 2002).

4 Per capita consumption for India, Brazil and China from World Bank, World Development Indicators Database, 2003. Indian consumption in 1951 is given in Government of India, Central Water and Power Commission, Public Electricity Supply, All-India Statistics (New Delhi: Ministry of Irrigation and Power, 1960).

5 Government of India, Office of the Registrar General and Census Commissioner, "Table S00019: Distribution of households by source and location of drinking water and availability of electricity," in Census of India, 2001.

6 Government of India, Planning Commission, "Annual Report (2001-2002) on the Working of State Electricity Boards and Electricity Departments," (New Delhi: Planning Commission, 2002), p. 40.

7 The Ministry of Power is seeking to revise the definition to capture measures of actual electricity use.

8 Planning Commission, Annual Report (2001-2002), p. 5.

9 Planning Commission, Annual Report (2001-2002), pp. 7-8.

10 Government of India, Ministry of Finance, Economic Survey (2003-2003), table 2.10.

11 H.V.R. Iengar, "A Look at the Bombay Plan in the Light of Today," in The Bombay Plan & Other Essays, second A. D. Shroff Memorial Lecture, delivered under the auspices of Forum of Free Enterprise (Bombay: Lalvani Publishing House, 1968).

12 Sudipta Kaviraj, "A Critique of the Passive Revolution," in Partha Chatterjee, ed., State and Politics in India (Delhi: Oxford University Press, 1997), p. 64.

13 Ashutosh Varshney, Democracy, Development, and the Countryside: Urban-Rural Struggles in India (Cambridge: Cambridge University Press, 1995).

14 Sanjaya Baru, "Economic Policy and the Development of Capitalism in India: The Role of Regional Capitalists and Political Parties," in Francine Frankel et al., ed., Transforming India: Social and Political Dynamics of Democracy (New Delhi: Oxford University Press); T.V. Sathyamurthy, "Impact of Centre-State Relations in Indian Politics: An Interpretive Reckoning 1947-1987," in Partha Chatterjee, ed., State and Politics in India (New Delhi: Oxford University Press, 1997).

15 Francine Frankel, India's Green Revolution: Economic G ains and Political Costs (Princeton: Princeton University Press, 1971). Girish Sant and Santanu Dixit, "Beneficiaries of the IPS Subsidy and the Impact of Tariff-Hike," Economic and Political Weekly, December 21, 1996, make a similar argument about subsidies in the 1990s.

16 World Bank, Bureaucrats in Business (Washington, DC: Oxford University Press, 1995).

17 Pranab Bardhan, The Political Economy of Development in India (Oxford: Basil Blackwell, 1984), p. 40.

18 V.R. Muraleedharan, "The Electrification of Madras City, 1905-1914," paper presented to the Third World Economic History and Development Conference, University of Manchester, 13-15 September 1991, p. 4.

19 Electricity (Supply) Act, 1948, act no. 54 of 1948, preamble.

20 Government of India (GoI), Constituent Assembly Debates (CAD), vol. VI, part II, 1948, Aug. 9-31, p. 54.

21 GoI, GAD, vol. VI, part II, 9-31 Aug. 1948, p. 41.

22 GoI, CAD, vol. VI, part II, 9-31 Aug. 1948, p. 58.

23 Francine Frankel, India's Political Economy, 1947-1977: The Gradual Revolution (Princeton: Princeton University Press, 1978), pp. 71-94.

24 Electricity (Supply) Act, 1948, Section 18(a).

25 Government of India, Planning Commission, Programme Evaluation Organisation, Report on the Evaluation of the Rural Electrification Programme (New Delhi, 1965), p. 32.

26 GoI, CAD, vol. VI, part II, 9-31 August 1948, p. 50.

27 Section 5.1 of the Electricity (Supply) Act of 1948 reads that the "State Government shall, as soon as may be after the issue of the notification under subsection (4) of section 1, constitute by notification in the Official Gazette a State Electricity Board...."

28 Section 10.5, which was added by Act 101 of 1956, states, "If the Board fails to carry out its functions, or refuses or fails to follow the directions issued by the State Government under this Act. the State Government may remove the Chairman and the members of the Board and appoint a Chairman and members in their places."

29 Partha Chatterjee, A Possible India: Essays in Political Criticism (New Delhi: Oxford University Press, 1998), p. 67-73; Stuart Corbridge and John Harriss,