This Saturday’s highlight was the screening of the film Powerless at the Environmental Film Festival at Yale, where I was honored with the opportunity to participate in a panel on the film. Begin with the trailer, and then go see the entire film. It’s excellent.

The film depicts the desperate situation of the Kanpur Electricity Supply Company (KESCO) in Uttar Pradesh, India. Due to widespread electricity theft, the company incurs heavy losses and is unable to invest in power generation capacity to deal with daily power cuts. The urban poor refuse to pay their bills because of low incomes and the low quality of the service provided, instead acquiring electricity through illegal connections. Opportunistic politicians and corrupt bureaucrats do little to improve the situation, and those that try soon find themselves in a lot of trouble. The economic losses and human suffering caused by frequent power outages are not for the faint of heart.

In my opinion, one of key insights from the panel discussion that followed was the difficulty of solving the problem by focusing on any one aspect of the problem:

– Even if officials improve revenue collection, it is not clear at all that the poor benefit from improved electricity supply. The revenue could be squandered in useless “white elephants” or distributed to politically influential constituencies as patronage. So, why would the poor collaborate with officials to improve the system?

– Investments in more power generation and better distribution are hard to sustain without improved revenue collection. Even if the state or municipal authorities decide to fund an investment program in the power sector, KESCO remains financially vulnerable and cannot credibly guarantee a stable, adequate supply of electricity in the long run. Why should the state invest in a public company that will simply keep begging for more and more money in the future?

To me, it seems that any practical solution to the problem must address both problems. Revenue collection should be improved to tackle the problem of electricity theft, but the local communities must receive a credible guarantee that if they collaborate with the officials, they receive an acceptable level of service. For example, the officials could promise a certain number of hours of electricity as long as a certain percentage of people in a neighborhood pay their bills. This accountability system would provide both sides with clear incentives to act.

Would it work in practice? Probably not unless the top brass made improved public services a priority in their electoral strategy. If a committed leader wanted to make a difference and win the next election through improved livelihoods, however, such a strategy could be worth a try. I am certainly going to bring this idea up the next time I find myself in Kanpur – stay tuned.