Does energy accessibility improve human development? Evidence from energy-poor regions

Highlights: • Examines the effect of energy accessibility on human development in energy-poor regions. • Energy accessibility improves human development in sub-Saharan Africa and Caribbean-Latin America. • Energy accessibility worsens human development in South Asia. • Energy accessibility moderates the impact of economic growth to influence human development. • Energy accessibility does not equally benefit all the components of human development. Access to energy is recognised to be at the heart of human development. However, there is a paucity of empirical research on the impact of access to energy on human development, particularly in energy-poor countries. This study, therefore, examines the effect of access to electricity and clean energy on human development in 79 energy-poor countries from South Asia, sub-Saharan Africa, and Caribbean-Latin America for the period 1990–2018. Using the Lewbel two-stage least squares approach to control for endogeneity, our study reveals that access to both electricity and clean energy improve human development in the aggregated sample. Comparatively, our results also suggest that while access to both electricity and clean energy enhance human development in Caribbean-Latin America and sub-Saharan Africa, they worsen human development in South Asia. Generally, our results indicate that economic growth, trade openness, foreign direct investment, urbanisation, access to credit and remittance enhance human development. This study also indicates that employment, industrialisation, economic growth, ICT, and gender empowerment are some of the important channels through which energy accessibility influence human development. The comparative effect of access to electricity, clean energy, and the control variables on different facets of human development such as education (human capital) and health (life expectancy, maternal mortality, and under-five mortality) are presented. In this study, we conclude that access to energy is crucial for human development but does not equally benefit all the components of human development.