| Code | IC.ELC.ACS.COST |
| Indicator Name | Cost (% of income per capita) |
| Long definition | The cost is the total median cost associated with completing the procedures to connect a warehouse to electricity. It is calculated as a percentage of income per capita. All the fees and costs associated with completing the procedures to connect a warehouse to electricity are recorded, including those related to obtaining clearances from government agencies, applying for the connection, receiving inspections of both the site and the internal wiring, purchasing material, getting the actual connection works and paying a security deposit. Bribes are not included. |
| Source | World Bank Group, Doing Business project (http://www.doingbusiness.org/). |
| Topic | Getting electricity |
| Periodicity | Annual |
| Reference period | Data are presented for the survey year instead of publication year. |
| Statistical concept and methodology | Data are collected by the World Bank Group with a standardized questionnaire that uses a simple business case to ensure comparability across economies and over time—with assumptions about the legal form of the business, its size, its location and nature of its operation. Questionnaires are administered to more than 13,800 local experts, including lawyers, business consultants, accountants, freight forwarders, government officials and other professionals routinely administering or advising on legal and regulatory requirements.
The Doing Business data are based on a detailed reading of domestic laws, regulations and administrative requirements as well as their implementation in practice as experienced by private firms. The report covers 190 economies—including some of the smallest and poorest economies, for which little or no data are available from other sources. The data are collected through several rounds of communication with expert respondents (both private sector practitioners and government officials), through responses to questionnaires, conference calls, written correspondence and visits by the team. Doing Business relies on four main sources of information: the relevant laws and regulations, Doing Business respondents, the governments of the economies covered and the World Bank Group regional staff. |
| Development relevance | Infrastructure services are a major concern for businesses around the world. Getting electricity services in particular is known to be a substantial obstacle to entrepreneurial activity. Power outages can severely hamper business activity as well as the economy as a whole. For example, power outages can lead to sale losses and decreases in productivity. Research also shows that capital tends to go to economies that can offer a reliable and competitively priced supply of electricity. That is why, by providing insight into the complex regulatory environment concerning electricity connections and measuring how regulations and institutions affect a firm's ability to get a new connection, Doing Business can thus help identify bottlenecks and prompt policy makers to introduce more conducive regulations. |
| Limitations and exceptions | The Doing Business methodology has five limitations that should be considered when interpreting the data. First, for most economies the collected data refer to businesses in the largest business city and may not be representative of regulation in other parts of the economy. Second, the data often focus on a specific business form—generally a limited liability company (or its legal equivalent) of a specified size—and may not be representative of the regulation on other businesses. Third, transactions described in a standardized case scenario refer to a specific set of issues and may not represent the full set of issues that a business encounters. Fourth, the measures of time involve an element of judgment by the expert respondents. When sources indicate different estimates, the time indicators reported in Doing Business represent the median values of several responses given under the assumptions of the standardized case. Finally, the methodology assumes that a business has full information on what is required and does not waste time when completing procedures. In practice, completing a procedure may take longer if the business lacks information or is unable to follow up promptly. Alternatively, the business may choose to disregard some burdensome procedures. For both reasons the time delays reported in Doing Business would differ from the recollection of entrepreneurs reported in the World Bank Group Enterprise questionnaires or other firm-level questionnaires. |
| |