This paper examines democracy and governance aspects of energy sector reform, especially power sector reform. It examines the difficult history of energy sector reform programs and some reasons why many of those programs have not proved to be sustainable. Chief among these reasons is a focus on the technical requirements for an efficient sector, with little or no attention to the social and political aspects of the sector. The job of making the sector run more efficiently has often been only partially realized and sometimes not realized at all.
The paper argues that paying attention to the political and social aspects of the sector means paying attention to the lessons learned as countries throughout the world have moved toward democracy. The paper examines five key diagnostic elements of determining the level of democratic governance in a country and applies those same lessons to the energy sector. The five diagnostic elements are (i) level of inclusion; (ii) extent of good governance; (iii) measure of consensus; (iv) degree of rule of law; and (v) extent of competition.