Lighting Up Bihar: Electricity Service Delivery as a Collection Action Problem

Each poor person cannot buy urban services alone. Many important urban services are utility or network goods, that are only viable to supply at scale, meaning that each customer’s access depends on the take-up and payments of others. This evaluation uses a group-level incentive to address this collective action problem in the context of grid electricity, where high theft and other losses limit investment and supply. The hours of power supply to each neighborhood will be explicitly linked to aggregate payment rates from that area so that higher-paying groups can earn more reliable supply. This evaluation tests how the response to this incentive in terms of collection revenues and power supply varies with group size and composition. A second treatment arm addresses supply constraints from within by providing collection incentives to the staff of electricity distribution companies.