Closed political processes and politically powerful groups constrain attention to sustainable development objectives.

To a large extent, reforms were designed by government bureaucrats and their consultants in the energy and finance ministries, to the exclusion of other voices. In Argentina, for example, reforms were designed and implemented with great speed by a small group of technocrats. Even within governments, the cases show little evidence of involvement by environment and rural development ministries in the design stage of reform. Despite a vibrant civil society, the cases do not provide instances of participation or influence by nongovernmental organizations (NGOs) in policy design, even though several NGOs have been active in this area. South Africa - with a more open reform design process, greater engagement by a range of ministries, and more participation by outside experts -is an exception.

In all the cases, tariff increases and restructuring have proved to be the single biggest sticking point to electricity reform and have been greeted by popular uprisings in Argentina, India, Indonesia, Ghana, and South Africa. Powerful political constituencies have also been obstacles to reform. In Ghana and South Africa, existing public utilities initially argued for their continued viability as integrated public entities. Faced with the possibility of socially destabilizing labor retrenchment, labor unions have been a political force against reform. However, in both Argentina and Bolivia, unions won a share in the equity of privatized state enterprises demonstrating the possibility of political compromise.

The case studies do not conclusively demonstrate that an open process is preferable to the quick and stealthy approach to reforms. The threat remains that open reform processes could be politically captured by narrow interests. However, there are indications that an open process is the better alternative. To be politically sustainable, the public must believe that reforms will lead to demonstrable benefits -an outcome that is better supported by a transparent process. An exclusive process is also prey to being subverted and used for narrow ends by the new wielders of authority, as was arguably the case with the experience of IPPs in Asia. An open process would provide checks on such abuses of power.

Donor agencies have initiated reforms and advocated attention to environmental concerns, but have been hampered by past reputation and a perception of favoring private interests.

Donor agencies have been central to cutting through a domestic political morass to initiate reforms. In India, it took World Bank intervention for governments at the state level to agree to seriously examine the need for new institutional and financial arrangements. While this initial firmness may have been necessary, a continued heavy hand in steering reforms undermined domestic ownership, with negative consequences. For example, donors sought to expand the role for the private sector and establish the conditions for profit making in Ghana and India, when it was not clear that the regulatory environment was sufficiently developed to support those changes.

At the same time, donor agencies have often taken the lead in preparing studies and undertaking projects related to the environmental dimensions of electricity reform. World Bank studies on the environmental impact of restructuring have been influential in shaping policy in Bulgaria, as have efforts by the Danish government to promote renewable energy in Ghana. Often, however, these efforts have been late, too restricted in scope, and not backed by adequate political signals.

Moreover, donor agencies' efforts to provide assistance have been hampered by a reputational burden built over a decade or more of controversial structural adjustment policies, which the public associated with economic hardship and undue promotion of private sector interests. This reputation has been worsened by the industrialized countries' efforts to promote the interests of their own corporations. Such was the case in Indonesia, where one arm of the U.S. government sought to promote a large U.S.-funded IPP, even as an advisor supported by its aid agency, USAID, cautioned against the project.

To be effective, public benefits need to be factored into reform design early and backed by political commitment.

For reform designers, ensuring a financially viable sector was the most relevant definition of public benefits. Social and environmental concerns were matters to be grafted onto reforms at a later stage. However, the Argentina experience -where reforms led to subsidy removal and tariffs that were skewed against low-income groups -suggests that a laissez faire approach does not automatically support social objectives and can undermine equity in outcomes. Since technical, political, and institutional decisions made during reforms constrain future choices, it is hard to retrofit the sector to address public benefits.

For example, IPPs in India and Indonesia locked those countries into large generation plants. This undermined efforts at energy efficiency and committed utilities to buy electricity at uncompetitive prices. In another example, regulators' mandates, priorities, and skills were established in the early stages of reform. Without attention to sustainable development goals in the inception process, it will be an uphill battle to re-direct regulators' attention from short-term concerns to longer-term social and environmental concerns.

These longer-term concerns merit attention. In several countries shifting to a decentralized, market approach has contributed to the absence of a broad vision for the sector. In Argentina, this absence undermined the integrity of the transmission system. In India, the central government has belatedly attempted to forge a broad vision to guide state-level reforms. In Bulgaria, a vision for the future was initially built on an unviable export strategy. Most significantly, pressing social and environmental concerns have not been integrated into reforms. In India and Ghana, the process of institutional reform was not coordinated with ongoing, and ineffective, electrification programs. By contrast, in South Africa reforms have been closely associated with a political commitment to expand access to electricity. In Bulgaria, international environmental commitments have not played a role in electricity reform, despite the sector 's considerable environmental footprint. Without a broad vision and political support, the case studies suggest that public benefits are prey to political whims and shifting trends in donor assistance.