Getting reforms done in inhospitable institutional environments: untying a Gordian Knot in India’s power distribution sector

Abstract

When grand institutional reforms based on idealized models are stalled by the poor institutional environments and difficult politics which often surround large infrastructure systems in developing countries, partial reforms whose design and implementation take into account the different interests of the key stakeholders can provide valuable and immediate benefits while moving these systems from low- towards higher-level equilibria. Strategically negotiated, experimentally partial and purposefully hybrid, these reforms are based on careful stakeholder analysis and strategic coalition building that avoid rigid positions based on idealized models. Our findings are based on a study of power sector reforms in India, where we performed a micro-level and in-depth analysis of a partial and innovative experiment which has allowed private sector participation in electricity distribution within a hostile institutional environment.