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Out of the Darkness and into the Light? Development Effects of Rural Electrification

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  • Fiona Burlig
  • Louis Preonas

Abstract

Nearly 1 billion people still lack electricity access. Developing countries are investing billions of dollars in “last-mile” electrification, although evidence on its economic impacts is mixed. We estimate the development effects of rural electrification in the context of India’s national electrification program, RGGVY (Rajiv Gandhi Grameen Vidyutikaran Yojana), which reached over 400,000 villages. Using regression-discontinuity and difference-in-differences designs, we estimate that RGGVY meaningfully expanded electricity access. However, the program generated limited economic impacts after 3–5 years. Scaling our intent-to-treat estimates using instrumental variables, we find that “full electrification” reduces welfare in small villages but has a 33% internal rate of return in large villages.

Suggested Citation

  • Fiona Burlig & Louis Preonas, 2024. "Out of the Darkness and into the Light? Development Effects of Rural Electrification," Journal of Political Economy, University of Chicago Press, vol. 132(9), pages 2937-2971.
    • Handle: RePEc:ucp:jpolec:doi:10.1086/730204
    DOI: 10.1086/730204
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    Citations

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    Cited by:

    1. Azam, Mehtabul, 2026. "The Enclave Penalty: Tribes, Caste, and Electricity Reliability in India," IZA Discussion Papers 18493, IZA Network @ LISER.
    2. Casey, Gregory, 2025. "Energy availability and economic growth," Energy Economics, Elsevier, vol. 149(C).
    3. Nasirov, Shahriyar & Agostini, Claudio A. & Silva, Carlos & Gutierrez-Lagos, Luis, 2025. "Analysis of rural electrification policy formulation in Chile: Key policy challenges for developing rural electrification based on off-grid systems," Energy Policy, Elsevier, vol. 198(C).
    4. Lise Masselus & Jörg Ankel-Peters & Gabriel Gonzalez Sutil & Vijay Modi & Joel Mugyenyi & Anicet Munyehirwe & Nathan Williams & Maximiliane Sievert, 2025. "Adoption of Electricity in Rural Rwanda 10 Years after Connection," Nature Communications, Nature, vol. 16(1), pages 1-10, December.
    5. Feng Wang & Weiwei Liu, 2024. "The Current Status, Challenges, and Future of China’s Photovoltaic Industry: A Literature Review and Outlook," Energies, MDPI, vol. 17(22), pages 1-18, November.
    6. Andrea Xamo & Roberto Ricciuti, 2025. "Electricity and the Geography of Industrial Development in a Latecomer Country: Preliminary Evidence on Italy, 1901-1911," Working Papers 01/2025, University of Verona, Department of Economics.
    7. Lang, Megan, 2025. "The role of market frictions in demand for prepaid electricity," Journal of Development Economics, Elsevier, vol. 175(C).
    8. Lai, Wangyang & Lin, Liguo & Shen, Xiaochi & Zhou, Maigeng, 2025. "Investing in a transition fuel: The remarkable decline in mortality from China's rollout of natural gas infrastructure," Journal of Environmental Economics and Management, Elsevier, vol. 130(C).
    9. Nan Yang & Jinliu Chen & Liang Ban & Pengcheng Li & Haoqi Wang, 2024. "Pre-Planning and Post-Evaluation Approaches to Sustainable Vernacular Architectural Practice: A Research-by-Design Study to Building Renovation in Shangri-La’s Shanpian House, China," Sustainability, MDPI, vol. 16(21), pages 1-22, November.
    10. Enoch Ntsiful & François Cohen, 2025. "Refrigeration, Diets and Human Health: Evidence from Ghana," IREA Working Papers 202523, University of Barcelona, Research Institute of Applied Economics.
    11. Zaman, Rafia & Borsky, Stefan, 2025. "Solar power play: Uncovering political capture in distributing electricity access," World Development, Elsevier, vol. 193(C).
    12. Xia, Fang & Gao, Xuwen & Fan, Shenggen & Song, Feng, 2025. "The impact of reliable electricity access on agricultural income and land utilization in China," Energy Economics, Elsevier, vol. 150(C).
    13. Cavatassi, Romina & Garg, Teevrat & Graff Zivin, Joshua & Paolantonio, Adriana & Vargas, David & Wollburg, Philip, 2026. "Climate Change Adaptation and Development: A Conceptual Framework," IZA Discussion Papers 18464, IZA Network @ LISER.
    14. Dabalen, Andrew L. & Khemani, Stuti & Lang, Megan Elizabeth & Timilsina, Govinda R., 2026. "Electrifying Africa’s Economic Transformation : What Reforms Should Governments Pursue?," Policy Research Working Paper Series 11339, The World Bank.
    15. Tenaw, Dagmawe & Greco, Luciano & Rettore, Enrico, 2026. "Household energy poverty amidst large-scale electrification: Impacts of grid reliability and off-grid solar technologies," Energy Policy, Elsevier, vol. 208(C).
    16. Xiaomin Shi & Xiang Gao & Rong Li & Ke Hou & Yang Song & Zhongjiang Lu, 2025. "The Impact of Electricity Grid Development on Economic Growth and Energy Consumption in Anhui Province: A Seemingly Unrelated Regression-Based Analysis," Sustainability, MDPI, vol. 17(7), pages 1-20, April.
    17. Schmidt, Maika & Moradi, Alexander, 2026. "Community effects of electrification: Evidence from Burkina Faso’s grid extension," Journal of Development Economics, Elsevier, vol. 178(C).

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