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Clean or “Dirty” Energy: Evidence on a Renewable Energy Resource Curse

Author

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  • Caterina Gennaioli

    (Fondazione Eni Enrico Mattei)

  • Massimo Tavoni

    (Fondazione Eni Enrico Mattei)

Abstract

The aim of this paper is to provide an assessment of the potential for resource curse in the renewable energy sector. Taking a political economy approach, we analyze the link between public support schemes for renewable energy and the potential scope for rent seeking and corruption. The insights of a model of political influence by interest groups are tested empirically using a panel data of Italian provinces for the period 1990-2007. We find evidence that a curse exists in the case of wind energy, and specifically that: i) criminal association activity increased more in high-wind provinces and especially after the introduction of a more favourable public policy regime and, ii) the expansion of the wind energy sector has been driven by both the wind level and the quality of political institutions, through their effect on criminal association. The analysis points out that in the presence of poor institutions, efficient market-based policies can have an adverse impact. This has important normative implications especially for countries that are characterized by abundant renewable resources and weak institutions, and are thus more susceptible to the private exploitation of public incentives.

Suggested Citation

  • Caterina Gennaioli & Massimo Tavoni, 2011. "Clean or “Dirty” Energy: Evidence on a Renewable Energy Resource Curse," Working Papers 2011.63, Fondazione Eni Enrico Mattei.
  • Handle: RePEc:fem:femwpa:2011.63
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    Cited by:

    1. David Popp, 2012. "The Role of Technological Change in Green Growth," NBER Working Papers 18506, National Bureau of Economic Research, Inc.
    2. Athanasios Lapatinas & Anastasia Litina & Eftichios Sophocles Sartzetakis, 2014. "Is Abatement Effective in the Presence of Corruption? A Theoretical Exploration," CREA Discussion Paper Series 14-29, Center for Research in Economic Analysis, University of Luxembourg.
    3. Mikiyasu Nakayama & Miko Maekawa, 2013. "Economic benefits and security implications of trading hydropower through transboundary power grids in Asia," International Journal of Water Resources Development, Taylor & Francis Journals, vol. 29(4), pages 501-513, December.
    4. Caterina Gennaioli & Ralf Martin & Mirabelle Muûls, 2013. "Using micro data to examine causal effects of climate policy," Chapters,in: Handbook on Energy and Climate Change, chapter 20, pages 453-470 Edward Elgar Publishing.

    More about this item

    Keywords

    Corruption; Natural Resources Curse; Wind Energy; Political Economy;

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism

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