Efficiency and ownership in electricity distribution: A non-parametric model of the Turkish experience

The traditional structure of integrated monopoly in electricity supply is being abandoned and the general trend is towards privatization and deregulation. Turkey is no exception and has been deregulating its electricity market since 1984. Now, along side the publicly operated distribution organizations, there are four privately operated companies on the distribution side. This paper uses a non-parametric methodology to create a benchmark measure for the relative performance of the publicly operated organizations as well as the publicly operated organizations and their private counterparts. The early results show better technical and scale efficiency scores for the privately operated distribution organizations. However, this does not necessarily imply the success of private ownership in electricity distribution, since there are also technically and scale efficient publicly operated distribution organizations. This article therefore concentrates on finding the sources of inefficiencies by analysis of data and market structure, and discusses these in the context of the Turkish electricity market.