156 CHAPTER 10


pletely different views. Members of the market-oriented discourse coali- tion consider the argument that zero marginal costs cause inefficiency so compelling that they feel no empirical evidence is needed to make this point. However, this argument alone—without empirical evidence—does not convince stakeholders who hold different causal beliefs on the matter: these stakeholders marshal counterarguments that would, indeed, require further analysis, such as the effect of the time restrictions on power sup- ply on groundwater extraction. Another example is the transaction costs of metering. Even though this is essentially an empirical question, limited efforts have been made to estimate these costs under different scenarios. In both cases, the information must be provided by research institutions that are considered neutral and trustworthy by members of both discourse coalitions. Moreover, the information needs to be provided in an easily accessible form.


4. There is a range of “third-way” solutions, which fall between the market- oriented and the welfare-state-centered paradigm because they focus on communities rather than state institutions or the private sector. A promi- nent example is the devolution of responsibilities to local communities, for example by creating transformer-user associations or energy coopera- tives, possibly linked with groundwater-user associations. There is already practical experience in this regard, promoted both by foreign-funded proj- ects (such as the USAID-funded Water and Energy Nexus Activity, or WENEXA project) and by farmers’ organizations (such as the Andhra Pradesh Fed- eration of Farmers Associations.) Yet, although such solutions seem to be highly acceptable to groups with different belief systems, they did not figure prominently in the discourse of the interviewed stakeholders.


5. The power-sector reforms in Andhra Pradesh show that policy change is easier if it concentrates on areas that are subject to instrumental policy beliefs, such as unbundling (restructuring within the public sector), rather than policy core beliefs, such as privatization. The fact that reform efforts in Punjab concentrate on a rather far-reaching reform model (privatiza- tion) may well contribute to the lack of progress so far. As with targeted subsidies, unbundling without privatization might be a middle ground accept- able to groups with opposite belief systems.


Taking these insights into account, the next chapter discusses several policy options for reforming the electricity supply to agriculture.


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