Privatization, technical efficiency and welfare consequences: The case of the Côte d'Ivoire Electricity Company (CIE)

In 1990, Côte d'Ivoire privatized the management of its electric power company (lease contracting). In this paper, we are interested in identifying the economic effect of this institutional change. By estimating a stochastic production frontier, we have found that productive efficiency improved after privatization thanks to organizational innovations. Total factor productivity gains have been closely associated with a cost-reduction strategy. The way these gains have been distributed in a monopoly context suggests that consumers have been the main beneficiaries through a significant decrease of the relative price of electricity.