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Public debt and energy poverty alleviation: Identifying the threshold effects of economic development and institutional quality

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  • Benayed, Walid
  • Bousnina, Rihab
  • Gabsi, Foued Badr

Abstract

This paper employs a panel threshold model to explore the nonlinear relationship between energy poverty and public debt across 27 Sub-Saharan African countries from 2010 to 2021. It considers income inequality, economic development, and institutional quality as potential thresholds. The findings indicate that public debt can help reduce energy poverty, but only after a certain level of economic development has been achieved. Additionally, strong institutions and reduced inequality are critical for public debt to effectively address energy poverty. These results are robust across various public debt indicators and hold true even when employing a dynamic panel threshold model. Thus, strategies aimed at combating corruption, reducing income inequality, and fostering economic development are essential for leveraging public debt to alleviate energy poverty.

Suggested Citation

  • Benayed, Walid & Bousnina, Rihab & Gabsi, Foued Badr, 2025. "Public debt and energy poverty alleviation: Identifying the threshold effects of economic development and institutional quality," Energy, Elsevier, vol. 334(C).
    • Handle: RePEc:eee:energy:v:334:y:2025:i:c:s0360544225032116
    DOI: 10.1016/j.energy.2025.137569
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    Keywords

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    JEL classification:

    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • H6 - Public Economics - - National Budget, Deficit, and Debt
    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models

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