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Electricity availability: A precondition for faster economic growth?

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  • Rohan Best
  • Paul J. Burke

Abstract

We investigate if greater electricity availability helps countries ascend to faster economic growth trajectories. This is an important question for many developing countries that are currently prioritizing infrastructure investments. Using cross-sectional and panel regressions with national-level decadal data, we find some evidence that electricity availability has a significant effect on subsequent economic growth. However, much of the effect disappears once suitable controls are included. We examine various dimensions of electricity availability, including electricity consumption quantity, generation capacity, residential access rate, and quality of electricity supply. It appears that electricity availability is best viewed as something that can be scaled up as economies grow rather than something that imposes binding constraints on subsequent economic growth.

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  • Rohan Best & Paul J. Burke, 2018. "Electricity availability: A precondition for faster economic growth?," CAMA Working Papers 2018-30, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    • Handle: RePEc:een:camaaa:2018-30
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    4. Obsa Urgessa Ayana & Jima Degaga, 2022. "Effects of rural electrification on household welfare: a meta-regression analysis," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 69(2), pages 209-261, June.
    5. Solomon P. Nathaniel & Festus V. Bekun, 2020. "Electricity Consumption, Urbanization and Economic Growth in Nigeria: New Insights from Combined Cointegration amidst Structural Breaks," Working Papers of the African Governance and Development Institute. 20/013, African Governance and Development Institute..
    6. Gerard Bikorimana & Charles Rutikanga & Didier Mwizerwa, 2020. "Linking energy consumption with economic growth: Rwanda as a case study," ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT, FrancoAngeli Editore, vol. 2020(2), pages 181-200.
    7. Sudati Nur Safiah & Rr. Retno Sugiharti & Rian Destiningsih & Putra Arif Budiman, 2021. "Dynamic Model for the Consumption of Electrical Energy in Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 11(5), pages 356-362.
    8. Nepal, Rabindra & Paija, Nirash, 2019. "Energy security, electricity, population and economic growth: The case of a developing South Asian resource-rich economy," Energy Policy, Elsevier, vol. 132(C), pages 771-781.
    9. Xu, Guangyue & Yang, Hualiu & Schwarz, Peter, 2022. "A strengthened relationship between electricity and economic growth in China: An empirical study with a structural equation model," Energy, Elsevier, vol. 241(C).
    10. Opoku, Eric Evans Osei & Acheampong, Alex O., 2023. "Energy justice and economic growth: Does democracy matter?," Journal of Policy Modeling, Elsevier, vol. 45(1), pages 160-186.
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    12. Garba, Ifeoluwa & Bellingham, Richard, 2021. "Energy poverty: Estimating the impact of solid cooking fuels on GDP per capita in developing countries - Case of sub-Saharan Africa," Energy, Elsevier, vol. 221(C).
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    17. Lawal, Adedoyin Isola & Ozturk, Ilhan & Olanipekun, Ifedolapo O. & Asaleye, Abiola John, 2020. "Examining the linkages between electricity consumption and economic growth in African economies," Energy, Elsevier, vol. 208(C).
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    21. Sosson Tadadjeu & Paul Ningaye & Henri Njangang, 2023. "Are natural resources also bad for infrastructure quality?," Journal of International Development, John Wiley & Sons, Ltd., vol. 35(6), pages 1053-1079, August.

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    More about this item

    Keywords

    electricity availability; electricity consumption; economic growth; development economics;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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