It is the purpose of this paper to evaluate the validity and relevance of that debate to developing countries, in terms of demand-side management, mainly where the publie sector exerts control over a significant portion of energy supply; and where that supply is sold predominantly in markets subject to consumers acting competitively. The central tenet of the paper is that confusion in the debate can only be avoided if a careful distinction is maintained between arguments related to the proper functioning of energy markets, on the one hand; and externalities, on the other.