AGENCY FOR INTERNATIONAL DEVELOPMENT FOR AID USE ONLY WASHINGTON. 0. C. 20523 BIBLIOGRAPHIC INPUT SHEET A. PRIMARY I. SUBJECT SOCIAL SCIENCE CLASSI­ FICATION .EODR DEVELOPMENT PLANNING 2. TITLE AND SUBTITLE RURAL ELECTRIFICATION: AN EVALUATION OF EFFECTS ON ECONOMIC AND SOCIAL CHANGES IN COSTA RICA AND COLOMBIA 3. AUTHOR(S) J.MICHAEL DAVIS, JOHN SAUNDERS AND GALEN C. MOSE-,S 4. DOCUMENT DATE NUMBER OF PAGES i 6.o ARC NUMBER " AUGUST 1973 319 PAGES ARC e _4 -- 0,--" 7. REFERENCE ORGANIZATION NAME AND ADDRESS UNIVERSITY OF FLORIDA CENTER FOR LATIN AMERICAN STUDIES GAINESVILLE, FLORIDA 32611 S. SUPPLEMENTARY NOTES (Sponsoring Organization, Pubtishers, Availability) 9. ABSTRACT The primary objective of this study was to examine the social and economic impact of rural electrification in selected areas of Costa Rica and Colombia. Secondary objectives were to determine the relationships of rural electrification to 4n­ frastructure development; to suggest alternative techniques, methodologies and criteria for measuring social and economic change attributable to rural electrification; to determine the comparative effectiveness of lending to private or state owned or controlled agencies and to rural electric cooperatives; to develop research in­ strumants which may be used effectively for evaluating the impact of rural electrifi­ cation in different cultural and national settings; and to record benchmark data. All heads of household (or in some case their representatives) were interviewed within the selected survey areas. In Costa Rica, 452 interviews were obtained and in Colombia 443 were completed. Among data obtained from the interviews were characteristics of household members, such as age, sex, occupation, and education, migration and propensity to migrate, exposure to mass media, occupation and employment, land use and ownership, satisfaction with life situation, level of living, and social participation. In addition to the saturaticn survey of households, case studies of commercial, farm, and agri-business enterprises were conducted. Also, some of the users of electricity surveyed in previous benchmark studies were re­ interviewed. 10. CONTROL NUMBER Ii. PRICE OF DOCUMENT PN-AAB - 0 6­ 12. DESCRIPTORS 13. PROJECT NUMBER 925-15-995-203 INFRASTRUCTURE DEVELOPMENT, COOPERATIVES, RESEARCH, 14. CONTRACT NUMBER BENCHMARK DATA, SURVEY, LAND USE, EMPLOYMENT, MIGRATION AID/CSD-3594 15. TYPE OF DOCUMENT RESEARCH STUDY AID 590-1 (4-741 I. , ' 'A-- -. I._ ANI EVALUATION, OF EFFECIS ON ECONO;1,IIC ANUJV SOCIAL CHA,44GES IJ COSTA RICA Ai!D COLO,1BIA Center Fm Triopicd Aytricutiru Center For Laitio A eiican Studies Un =:it'r (if Fi. rica hvit wije, Horcua32611i Institute of Food and Agricultrural Sciences RURAL ELECTRIFICATION: An evaluation of effects on economic and social changes in Costa Rica and Colombia Prepered for The Agency for International Development U. S. Department of State Washington, D. C. by J. Michael Davis Research Associate John Saunders Professor of Sociology Galen C. Moses Agricultural Economist James E. Ross, Project Director and Associate Professor of International Agriculture CENTER FOR TROPICAL AGRICULTURE CENTER FOR LATIN AMERICAN STUDIES University of Florida Gainesville, Florida 32611 Contract AID/csd-3594 August 31, 1973 PREFACE Financing distribution of electric energy to tural areas in devel­ oping countries is a relatively recent activity. The United States Agency for International Development (AID) was the first to loan funds for this purpose. In 1963 it authorized $400,000 to establish an elec­ tric cooperative in Nicaragua. Since then 11 loans have been made by AID for establishing or ex- panding electric service in non-urban areas of eight countries in Latin America. Two loans have been authorized to develop electric cooperatives in the Philippines. Three grants have been made to India for the devel­ also opment of electric cooperatives through state agencies. Grant funds have been made available to Vietnam for village electrification. At the present time, AID has wade 18 loans or grants in the amount of $186,490,000 for establishment or improvement of 91 electric distribution systems. The World Bank Group (the International Bank for Reconstruction and Development and the International Development Association) became the second institution to make an international loan for electrification of rural areas. In 1972 the World Bank Group granted a credit, which contained $450,000 for village electrification, to the Government of Ecuador. The funds are to finance part of the foreigt exchange costs needed for electrification of about 15 rural villages in the north and northwest parts of Canton Quito. Development of the AID and World Bank Group financed projects is providing a unique opportunity to study the effects of electrification on economic and social changes. Such studies were not conducted when rural communities in the United States or other developed countries were electrified., If analytical data on the development value of rural elec­ trification had been available, it would have helped provide criteria for judging the priority of electrification among other capital projects. Because of the lack of guidelines, feasibility studies of proposed rural electrification projects, largely, have been based on financial projections. While financial costs and benefits can be quantified, of they are not an adequate indication of the social and economic impact effect rural electrification. Financial projections reveal more about the of pricing policy than they do about the project's value to the region. Social and economic costs, also, can be determined with a relative degree of accuracy, but benefits are more difficult to measure. Emphasis and, in this study, therefore, has been placed on identifying benefits to within the time end resources available, developing social indicators for adap­ place beside economic measurements. Techniques were developed pro­ tation to determining project feasibility as well as in evaluating jects after construction. Gainesville, Florida August 31, 1973 iii ACKNOWLEDGMENTS This project would have been impossible without the exceptional assistance freely given us by many people of the countries studied. Victor Hugo Cespedes and Alvaro Vargas of the Instituta of Economic Investigations, University of Costa Rica greatly facilitated our efforts in constructing research instruments and in conducting the Costa Rican field survey. Oscar Benavides of the Costa Rican Electricity Institute and Bolivar Cruz of the National Bank of Costa Rica strongly supported our study. We would like to especially thank Fredy Arroyo, manager of the rural electric cooperative in San Carlos and Alfredo Chavarria, our chauffeur, for both their support and friendship. The good offices of Oscar E. Mazuera and Alfredo Roa of the Department of Economic Studies, CVC, greatly eased our work in Colombia. Our computer expert was Oleh Wolowyna. Without his assistance in programming, the analysis would have been substantially curtailed. We would also like to thank Norman Markworth, Terry Jabaly, and Maria Leon for their uniformly superior coding, our typists, Claudia Larimer, Joan Kaputa and Neva Clark, Helen Huseman for designing the cover, and the Editorial Depa~tment of the Institute of Food and Agricultural Sciences for publication of this report. We acknowledge the use of the Northeast Regional Data Center of the University of Florida and the cooperation of the Centers for Latin American Studies and Tropical Agriculture. iv CONTENTS Page PREFACE iii ACKNOWLEDGMENTS iv LIST OF TABLES vii LIST OF FIGURES xiv xvii ABSTRACT CHAPTER I INTRODUCTION AND SUMMARY 1 Objectives 2 Methodology 2 Description of Study Areas 4 Social and Economic Impact 5 Alternative Methodology and Techniques 25 Infrastructure Development 29 Compairative Sys tems 33 Recoimendations 35 II METHODOLOGY 43 Pertinent Studies 43 Research Design 47 Survey Schedules 49 Data Collection Procedures 55 Reliability and Validity of Data 57 Constructed Variables and Indexes 62 Data Processing 70 III COSTA RICA 73 Host Country Support 73 Some Characteristics of the Study Area 73 Selection of the Study Area 74 Selection of the Research Population 75 Demographic Characteristics 78 Social and Economic Factors 97 Power Consumption and Alternative Energy Sources 145 Re-interview An .:.ysis 157 Supplementary Interviews and Observations 180 201 Cartago Municipal System v CHAPTER Page IV COLOMBIA Host Country Support 207 Some Characteristics of the Study Area 207 Selection of the Study Area 209 Selection of the Research Population 211 Demographic Characteristics 211 Social and Economic Factors 218 Power Consumption and Alternative Energy Sources 247 Supplementary Interviews and Observations 255 Sevilla-Caicedonia Cooperative 261 BIBLIOGRAPHY 271 ABOUT THE AUTHORS 277 ABRIDGED SURVEY SCHEDULE 279 vi LIST OF TABLES Table Page 1 Questions Used In Level of Living Scale Which Are 64 Eliminated from Electricity-free Level of Living Scale 2 Percentages and Numbers of Respondents in Categories 82 of Age of the Head of the Household and Median Age by Users Variable, Costa Rica 3 Percentages and Numbers of Respondents in Categories 84 of Education of the Head of the Household by Users Variable and Median Year of Schooling, Costa Rica 4 Percentages and Numbers of Respondents in Occupational 86 Categories by Users Variable, Costa Rica 5 Percentage of Users of Electricity by Occupational 87 Categories, Costa Rica 6 Size of Households by Frequency of Occurrence and Number 88 of People,