Succeeding in Energy Transition in Sub-Saharan Africa: Does Institutional Quality Matter?
DOI:
https://doi.org/10.15173/esr.v26i1.4922Abstract
The objective of this article is to examine the effect of the quality of institutions on energy transition in 19 sub-Saharan African (SSA) countries over the period 1996-2016. To achieve this, we proceed in two steps. We first use the principal component analysis (PCA) to construct a composite indicator of institutional quality, from Kaufmann’s (1996) six indicators of governance. Then, we estimate an autoregressive distributive lag model (ARDL) on panel data using the pooled mean group (PMG) estimation technique. Our results show that the quality of institutions determines the energy transition in SSA. The associated coefficient is positive and statistically significant. In addition, our results show that economic growth and trade openness promote energy transition. On the other hand, it emerges that CO2 emissions hinder energy transition, due to the high dependence of the countries considered on fossil fuels. We suggest an improvement in the quality of institutions and the implementation of political incentives favorable to the adoption of new technologies.
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