Munich Personal RePEc Archive

The Effects of Non-Existent Property Ownership Rights Within the Electricity Production Sector on Labor Force Participation in the Dominican Republic

Stacey, Brian (2016): The Effects of Non-Existent Property Ownership Rights Within the Electricity Production Sector on Labor Force Participation in the Dominican Republic.

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Abstract

The labor market in the Dominican Republic is in disarray. There has been a high rate of unemployment and a very high rate of non-participation within the labor force for years. Output growth has been steady in manufacturing, telecommunication, and financial services, and new jobs have been added in the service sector consistently, however these gains have led to no real increase in available quality jobs and wage stagnation (Williams & Adedeji, 2004). Abdullaev and Marcello (2013) describe a dichotomous approach to solving the problem; through targeted education for the long term and through product market reforms in the near term. The energy sector in the Dominican Republic is a prime example of an area where reforms are needed to improve the operating environment to spur and sustain growth. At present the losses in transmission and distribution are significantly higher than in most places as a result of fraud (Smith 2004). Until recently it has not been against the law to steal electricity (Enerdata 2011). The rationale being that if electricity is a basic human right we cannot punish those who attempt to gain it. This lack of property law within the context of electricity underpins a significant failure by the government when viewed from the point of the electricity producers. Property ownership is a fundamental concept of free markets. Without ownership rights there is no (or limited) ability to charge for goods produced with that property. Electricity is a commodity property and without the ability to effectively charge for its consumption the producers have struggled.

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