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The influences of government spending on energy poverty: Evidence from developing countries

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  • Nguyen, Canh Phuc
  • Su, Thanh Dinh

Abstract

The literature has documented different determinants of energy poverty, i.e., income poverty, energy price, technology, and financial development. Meanwhile, government policies through public spending might play a critical role in alleviating energy poverty, but little attention has been paid to this factor. This study endeavours to investigate the effects of government spending on energy poverty in a global sample of 56 developing countries. Specifically, the study firstly examines the influence of government spending on four proxies of energy poverty. Secondly, we examine the role of institutional quality as the rule of the game in society, in the effects of government spending. Lastly, we investigate the channels of the effects of government spending on energy poverty. Applying several panel estimates, the significance of the results is threefold. First, government spending has a U-shaped effect on energy poverty, implying that increases in government spending may alleviate energy poverty until a certain level; however, from this tipping point, any excessive spending would be harmful to energy prosperity. Second, institutional quality serves as a critical catalyst in shaping the effects of government spending. Third, the effects of government spending are found to be transmitted through two channels: economic growth and income inequality.

Suggested Citation

  • Nguyen, Canh Phuc & Su, Thanh Dinh, 2022. "The influences of government spending on energy poverty: Evidence from developing countries," Energy, Elsevier, vol. 238(PA).
    • Handle: RePEc:eee:energy:v:238:y:2022:i:pa:s0360544221020338
    DOI: 10.1016/j.energy.2021.121785
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    More about this item

    Keywords

    Public policy; Government spending; Energy poverty; Clean fuels and technologies; Electricity; Developing countries;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • P46 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy

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