Does private sector participation improve performance in electricity and water distribution katharina gassner alexander popov and nataliya pushak p cm trends and policy options no 6. Is private operation better than public when it comes to utilities a recent global study funded by the world bank and public private infrastructure advisory facility ppiaf examines the effect of private sector participation in electricity distribution and water and sanitation services using a data set of more than 1200 utilities in 71 developing and transition economies the study finds that privately operated utilities convincingly outperform state run ones in operational performance . It analyzes data from 301 utilities with private sector participation psp and 926 utilities without psp in 71 developing and transition economies to evaluate the impact of psp on firm performance in electricity distribution and water and sanitation services private participation is shown to be associated with an increase in connections labor productivity and bill collection rates and a decrease in employment and electricity distributional losses. Private participation is shown to be associated with an increase in connections labor productivity and bill collection rates and a decrease in employment and electricity distributional losses. To address the question as rigorously as possible and to distill universally applicable results from the multitude of evidence this study examines the impact of private sector participation psp in water and electricity distribution using a data set of more than 1200 utilities in 71 developing and transition economies the sample includes 301 utilities with psp and 926state owned