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The Effect of Institutional Quality on Renewable Energy: Evidence from Developing Countries

Author

Listed:
  • Alpon Satrianto

    (Department of Economics, Faculty of Economics and Business, Universitas Negeri Padang, Padang City, Indonesia)

  • Akmil Ikhsan

    (Department of Economics, Faculty of Economics and Business, Universitas Negeri Padang, Padang City, Indonesia)

  • Evo Yunanda Dirma

    (Department of Management, Faculty of Economics and Business, Universitas Andalas, Padang City, Indonesia)

  • Candrianto Candrianto

    (Agro Industry Logistics Management, Politeknik ATI Padang, Padang City, Indonesia)

  • Egy Juniardi

    (Department of Management, Faculty of Economics, Universitas Sumatera Barat, Pariaman City, Indonesia)

  • Mia Ayu Gusti

    (Department of Management, Faculty of Economics and Business, Universitas Negeri Padang, Padang City, Indonesia)

Abstract

Renewable energy has changed the development paradigm by prioritizing environmental sustainability in every stage of the country development. Therefore, this research specifically provides an overview of how the institutional quality is used as a basis for policy in developing countries. The research results show that the institutional quality with indicators of government effectiveness, voice and accountability have a significant effect, while regulatory quality and rule of law do not have a significant effect on renewable energy. Then, tax revenue, foreign direct investment, domestic credit have a significant effect, but government expenditure does not have a significant effect on renewable energy. These results are proof that every country must have strong quality institutions with a clear and comprehensive policy scheme considering that energy transition targets are not carried out easily, so they require large amounts of financing, especially from the private sector. The government fiscal space tends to be narrow, which is an obstacle in developing countries in allocating costs for the energy transition, so it must be directed at financing strategies contained in appropriate policies.

Suggested Citation

  • Alpon Satrianto & Akmil Ikhsan & Evo Yunanda Dirma & Candrianto Candrianto & Egy Juniardi & Mia Ayu Gusti, 2024. "The Effect of Institutional Quality on Renewable Energy: Evidence from Developing Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 14(5), pages 678-686, September.
    • Handle: RePEc:eco:journ2:2024-05-68
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    More about this item

    Keywords

    Institutional Quality; Government Expenditure; Renewable Energy;
    All these keywords.

    JEL classification:

    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General

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