In gov we trust: the less we pay for improved electricity supply in Ghana

Background: Ghana is bedeviled with the lack of 24-h supply of electricity. This holds back economic growth and sustainable development prospects. Several studies have investigated varied factors that account for household's willingness-to-pay (WTP) for improved electricity services. However, not much is known about the role of trust as a proxy for social capital and household's WTP for improved electricity services. We hypothesize that trust (social capital) is a key factor in determining households WTP for a 24-h supply of electricity in Ghana, a service which is largely controlled by the government. Methods: This study uses primary data collected in a survey of households and applies the well-known and widely used Contingent Valuation Method (CVM) to estimate how much households who trust and those who do not trust in the government are willing to pay for a 24-h supply of electricity. Results: We have evidence that trust in the government is statistically significant and varies negatively with WTP for improved electricity supply. In line with our hypothesis and the few existing studies on trust-WTP relationship, we conclude that trust plays a key role in determining WTP for improved electricity services in Ghana. Our estimates which are downward biased constitute 15-17% of household's income. Conclusions: To advance the course of generating funds to sustain the supply of a 24-h supply of electricity, this study argues based on the evidence from the trust-WTP relationship that most households do not trust the government in the provision of efficient electricity services. Those who trust the government are currently not willing to pay more for an improved electricity service because they believed the promises made to them by politicians that they would be provided with an improved service without them having to pay more. We recommend that government (politicians) should not trivialize anything that bothers on trust as it is not without its associated consequences on consumer's WTP behaviour. Secondly, for efficient provision of improved electricity supply, policymakers should commence educating citizens on the unsustainability of government's provision given its limited budget and explore private sector options.