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Power outages and economic growth in Africa
Abstract
This paper estimates the total effect of power outages on economic growth in Sub-Saharan Africa over the period 1995-2007. Outages are instrumented using a satellite-based measure of lightning density. As suggested by Henderson et al. (2011), we also combine Penn World Tables GDP data with satellite-based data on nightlights to arrive at a more accurate measure of economic growth. Our results suggest that the annual economic growth drag of a weak power infrastructure is about 2 percentage points.
... IEA (2020) estimated that electricity outages and energyrelated crises plaguing most African countries had constrained the continent from achieving significant and meaningful development and growth levels. Andersen and Dalgaard (2013) noted that an erratic and constant electricity outage is the leading challenge facing most businesses in Nigeria, according to the world bank enterprise survey. The survey revealed that power supply constraint is the major problem facing more than 50 percent of the firms that responded to the survey, followed by access to finance (World-Bank; 2020). ...
... This sub-section provides brief review and discussion of key concepts relating to electricity blackout and factors productivity. The concept of electricity blackout is often used interchangeably as a power cut, power outage, and power failure in most literatures (Andersen and Dalgaard;Okeke;2016;Tonuchi;2019) . Most of these literature often describes electricity blackout as the loss of electricity power supply to a particular end-user. ...
... Tonuchi (2019) referred to an electricity outage as a situation where individuals, households, and firms who require and are willing to pay for the supply of electricity cannot access it. However, Andersen and Dalgaard (2013) made an effort to distinguish electricity blackout from a power outage when the authors noted that electricity blackout is a complete loss of electricity supply to an area. The author further noted that while power outages often last for a few weeks' electricity blackouts last for months. ...
This study empirically examined the impact of electricity power outages on Nigeria’s capital and labour productivity. The emphasis is on how frequent electricity outage reduces labour and capital effectiveness and other factors of production. To achieve the above objective, annual time series data on Total Factor Productivity - a proxy for Nigeria’s factors productivity, Power Outage (electric power transmission and distribution losses as % of output), and other controlled variables were used to estimate the relationship and all data were from World Bank Development Indicators (WDI). The Fully Modified Ordinary Least Square (FOLS) technique was adopted for analysis. The empirical results showed a negative relationship between power outages and factor productivity. The result also reveals that electricity pricing has a significant negative impact on the factor productivity while both electricity generation and population have a significant positive impact on Nigeria’s total factor productivity. The implication is that the substitution effect between labour and capital is positive, meaning that Nigeria exhibits a labour-intensive production function. In conclusion, the study is of the opinion that power outage and electricity pricing negatively impact factors productivity while electricity generation and population have a positive relationship with factors productivity in Nigeria.
... Second, the expansion of research perspectives and research objects. After sorting and summarizing the relevant foreign literature, it was found that the theory of economic growth drag effect is mainly used to measure natural resources, land resources, environmental pollution, environmental policy, unemployment, power infrastructure, etc. [3][4][5][6][7][8][9][10][11][12]. Scholars have transitioned from the early research on the drag effect of economic factors to the policy drag effect (environmental policy, financial policy, fiscal policy, etc.). ...
... 1, i and j are adjacent 0, i and j are not adjacent (12) In Equation (12), W ij is the adjacent space weight matrix, i and j are adjacent prefecturelevel cities, i = 1,2, . . . , 80; j = 1,2, . . . ...
As the global economic development intensifies the plunder of resources and the environment, the constraints are becoming more and more obvious. Based on the background of the strategy for ecological conservation and high-quality development of the Yellow River Basin, this paper intends to construct a resource-environment-constrained economic growth drag effect model and a spatial Dubin model, and explore the economic growth drag effect and its spatial differences in the Yellow River Basin under the constraints of resources and environment. The study found that the total drag effects of the overall economic growth of the Yellow River Basin that were obtained by the classic panel model without spatial effects is significantly negative. This is consistent with the conclusion that the average total drag effects of 80 prefecture-level cities is negative. The total drag effects of the overall economic growth of the Yellow River Basin changes from unconstrained to medium-constrained after adding spatial constraints, indicating that the spatial correlation of factors will restrict economic growth. From the level of the Yellow River sub-catchment, the total drag effect of the direct effects of the upper, middle, and lower reaches of the Yellow River is consistent with the total drag effect of the total effect. It shows that the upper economic growth is strongly constrained by the local resources and environment, while the downstream is strongly constrained by the adjacent resources and the environment. The research results provide references for resolving the resources and environment constraints in the Yellow River Basin. It provides useful inspiration for promoting ecological protection and high-quality development strategies in the Yellow River Basin.
... The limitations of macro-level analysis have long been established. Macro analysis looks at the long-run effects outages have on long-run growth through the lens of the neoclassical Solow growth model Andersen & Dalgaard, 2013). To illustrate how macro analysis failed, pointed to a Chilean study (Jaramillo & Skoknic, 1973), where the authors inferred that industries which were least electricity intense would have the largest loss per unit of reduced supply. ...
... Andersen and Dalgaard returned to a macro analysis approach in 2013. Using outages as a binary variable in a logarithmic regression model, Andersen and Dalgaard estimated that a 1% increase in the average frequency of outages in a month reduces long-run GDP by almost 3% for a sample of 39 Sub-Saharan countries, including Zambia (Andersen & Dalgaard, 2013). If all African countries had experienced South Africa's power quality, they state, their GDP per capita growth rate would have been increased by 2 percentage points. ...
When the power outages of 2015 occurred, 81% of Zambian grid electricity was powered by assets financed by the World Bank—all of it hydropower. The World Bank’s investment in hydropower came at a time when 85% of Zambia’s electricity was consumed by Zambia’s copper mining industry, which was also its direct intended beneficiary in 1973. In general, thinking within the Bank held that allocating resources for ‘productive’ sectors of the economy was justified because those sectors would then pay the taxes required to pay for ‘social’ infrastructure. Human development indicators do not suggest an improvement in quality of life for Zambians following the power investments until decades later, and for that the causality cannot be convincingly attributed to power generation. By 2018, only a third of the population was connected to the grid, meaning that investment in power for the mining sector still has not trickled down in power for all. Mining’s growth did however spur manufacturing growth, but that was stymied by neoliberal economic restructuring by the Zambian government on the advice of the Bretton Woods organisations in the 1990s. Manufacturing shows greater potential and better value per kilowatt-hour (kWh) of energy than mining for generating employment and GDP growth.
... The limitations of macro-level analysis have long been established. Macro analysis looks at the long-run effects outages have on long-run growth through the lens of the neoclassical Solow growth model Andersen & Dalgaard, 2013). To illustrate how macro analysis failed, pointed to a Chilean study (Jaramillo & Skoknic, 1973), where the authors inferred that industries which were least electricity intense would have the largest loss per unit of reduced supply. ...
... Andersen and Dalgaard returned to a macro analysis approach in 2013. Using outages as a binary variable in a logarithmic regression model, Andersen and Dalgaard estimated that a 1% increase in the average frequency of outages in a month reduces long-run GDP by almost 3% for a sample of 39 Sub-Saharan countries, including Zambia (Andersen & Dalgaard, 2013). If all African countries had experienced South Africa's power quality, they state, their GDP per capita growth rate would have been increased by 2 percentage points. ...
Microeconomic analyses of the impact of power outages do not suffer from the oversimplifying assumptions that macroeconomic analyses do, but microeconomic analyses relying on firm-level surveys are constrained by the accuracy of answers given by respondents. Research has found that power outages adversely impact productivity, but that the impact on manufacturing subsectors is not equal, and that neither is the downstream impact of an affected sector. Research has found that firms would be willing to shift their work timings if lower off-peak tariffs were offered, thus abating peak demand. Fewer long-duration interruptions are less damaging than several very short outages. Firms have multiple coping mechanisms, of which using backup diesel generation is one. Characteristics that predict whether firms use backup diesel generation are firm size, age, export orientation and sector. With fewer outages, firms were less equipped to respond to them, and so the bigger the individual cost when they did occur. Zambia experienced power outages prior to 2015, but not to the same extent, as demand caught up with Zambia’s supply. Manufacturing growth slowed. Lafarge in Zambia attributed its reduced revenues and profits from 2014 to 2016 to outages. Backup diesel generation accounted for about 10% of Zambia’s emissions in some months of 2019.
... Most existing studies evaluate the impact of power grid infrastructure from the point of view of electricity outages. It has been proven that electricity outages cause economic losses and that better power grid infrastructure can prevent these losses (Shiu and Lam 2004;Andersen and Dalgaard, 2013;Atems and Hotaling 2018). Other studies provide evidence that the contribution of power grid infrastructure to the economy is limited Hu, 2010, He, 2014). ...
... Based on the estimated coefficients of the regional output equation, energy equation and labor equation of the power grid infrastructure (equation (21) to (23)), we calculated the short-term and long-term elasticity of the power grid infrastructure to determine the economic output, electricity consumption and employment during the 1998-2002, 2003-2006, 2007-2013). All elasticity is positive, suggesting that investment in the power grid infrastructure boosts the regional economic output, increases electricity consumption, and improves employment. ...
What are the effects of power grid infrastructure investment on the regional economy, and what explains these effects? This paper uses the restricted profit model and a seemingly unrelated regression (SUR) to estimate the short-term and long-term effects of power grid infrastructure on regional economic growth in 30 provinces in China from 1998 to 2017. Our results show that (1) power grid infrastructure investment has a significant positive effect on regional economic growth; (2) the associated long-term impact on the economy is greater than the short-term impact; (3) regions with high energy demands and good industry fundation benefit more from power grid infrastructure in the long term; (4) the output elasticity of power-importing and balancing regions maintained an upward trend after an electricity shortage problem had been solved, while the elasticity in power-exporting regions was positive but steadily decreased because of the resource curse effect. This paper suggests that in the current stage, the power grid infrastructure is a good policy tool to drive regional economies. However, there are differences in investment priorities among different regions.
... Focusing on the electricity sector makes an interesting case since research on industry and country level in Africa shows huge consequences as a result of interrupted electricity network: As the occurrence of power outages increases by 1%, the output of a firm is estimated to reduce by 3.3% in a short run, and the gross domestic product (GDP) per capita reduces by 2.9% in the long run (Andersen and Dalgaard, 2013;Mensah, 2018). The disruption of services, such as electricity, and water, heavily impacts small firms with a low ability to cope, and this limits entrepreneurship and competition (Alby et al., 2013;Poczter, 2017). ...
The Intergovernmental Panel on Climate Change (IPCC) 2021 report has noted the perceived rise in severe weather phenomena such as heat radiations, hurricanes, flooding, and droughts and the rising scientific evidence attributing these events to anthropogenic sources of climate change. Cameroon as a nation is equally exposed to these climate vulnerabilities, and contributing to global climate efforts is imperative. She has earmarked the integration of 25% renewables in its electricity production mix and a 32% emission reduction, all as part of her commitment to global climate action. The fresh commitments coupled with a rapidly growing power demand have paved the way for a revolutionized approach to electricity generation in Cameroon. However, the imminent changes, as well as their implications, remain uncertain. This study explores how these emission reduction targets can be achieved through the adoption of a more sustainable power transition, which provides realistic solutions for emission reduction, escaping high carbon pathways. The assessment of the level at which long-term electricity generation scenarios in Cameroon could be renewable energy intensive was done using the Low Emissions Analysis Platform (LEAP) tool following a backcasting approach. The study noted that there is an implementation gap between earmarked policy ambitions and existing measures. The study recommended several opportunities in aspects, such as suitable share of technologies, administrative reforms, and required adjustments within the Nationally Determined Contributions (NDCs), which the government could exploit in the electricity sector to sail across the challenging trade-offs needed to become a sustainable economy in a carbon-constrained world. It equally examines actions that could help close the gap between earmarked policy ambitions and existing pathways and proposes cost-effective methods that were identified as priorities.
... The negative impact of power outages is well-documented for both firms (Pasha et al., 1989, Beenstock, 1991, Tishler, 1993, Beenstock et al., 1997, Serra and Fierro, 1997, Steinbuks and Foster, 2010, Alby et al., 2013, Allcott et al., 2016, Cole et al., 2018, Elliott et al., 2021, Chen et al., 2022 and households (Carlsson and Martinsson, 2007, Carlsson et al., 2011, Amador et al., 2013, Chakravorty et al., 2014, Ozbafli and Jenkins, 2016, Poczter, 2017, Kennedy et al., 2019, Meles, 2020, Bajo-Buenestado, 2021, Carlsson et al., 2021, Deutschmann et al., 2021, Meles et al., 2021, Motz, 2021, Sedai et al., 2021b, Alberini et al., 2022, Aweke and Navrud, 2022, Lawson, 2022, Toto, 2022, as well as for the economy as a whole (Sanghvi, 1982, de Nooij et al., 2007, 2009, Andersen and Dalgaard, 2013, Reichl et al., 2013, Carranza and Meeks, 2021, Woo et al., 2021. The evidence is for all parts of the world, and all levels of development. ...
There are many indicators of energy security. Few measure what really matters -- affordable and reliable energy supply -- and the trade-offs between the two. Reliability is physical, affordability is economic. Russia's latest invasion of Ukraine highlights some of the problems with energy security, from long-term contracts being broken to supposedly secure supplies being diverted to retired power plants being recommissioned to spillovers to other markets. The transition to carbon-free energy poses new challenges for energy security, from a shift in dependence from some resources (coal, oil, gas) to others (rare earths, wind, sunshine) to substantial redundancies in the energy capital stock to undercapitalized energy companies, while regulatory uncertainty deters investment. Renewables improve energy security in one dimension, but worsen it in others, particularly long spells of little wind. Security problems with rare earths and borrowed capital are less pronounced, as stock rather than flow.
... However, "SSA countries need massive investments in capacity expansion of generation, transmission and distribution networks" [94]. While regional integration efforts are positive signs of future improvement [95], the weakness of the grid represents a major challenge to the effective harnessing of the resources produced [96]. According to the European Commission, quoted by IRENA [97], more than two thirds of SSA countries have "transmission networks where 50% or more of the lines are at least 30 years old" [98]. ...
The resource curse haunts countries whose economies have become dangerously specialized in the exploitation of a single resource. This curse threatens countries whose economies are poorly diversified and oriented mainly towards the export of their non-renewable natural resources, such as oil. What about the exploitation of an abundant renewable natural resource such as solar energy? Based on a case study of six solar power plants in six African countries (Burkina Faso, Madagascar, Morocco, Rwanda, Senegal, and South Africa), this paper analyzes the extent to which the impacts of the exploitation of these energy systems contribute to this curse. The research method is qualitative (296 interviews) and quantitative (use of a sustainability index), making it possible to analyze the impacts of solar power plants on four levels (local, regional, national, and international). Our results reveal four findings symptomatic of the resource curse: (i) the emergence of conflict situations, (ii) fragile local development, (iii) latent financial risk, and (iv) limited economic development leverage. In short, the resource curse linked to the use of renewable energies seems to bring another challenge to the landscape of energy transition.
... It is a certainty that this number will be lower than 87%, but at present there is no systemic global monitoring of electric power services [2]. Supply shortfalls and disruptions constrain economic development [3] and negatively impact education and human health [4]. The use of diesel generators during outages has its own set of economic and health impacts [5]. ...
Electric power services are fundamental to prosperity and economic development. Disruptions in the electricity power service can range from minutes to days. Such events are common in many developing economies, where the power generation and delivery infrastructure is often insufficient to meet demand and operational challenges. Yet, despite the large impacts, poor data availability has meant that relatively little is known about the spatial and temporal patterns of electric power reliability. Here, we explore the expressions of electric power instability recorded in temporal profiles of satellite observed surface lighting collected by the Visible Infrared Imaging Radiometer Suite (VIIRS) low light imaging day/night band (DNB). The nightly temporal profiles span from 2012 through to mid-2020 and contain more than 3000 observations, each from a total of 16 test sites from Africa, Asia, and North America. We present our findings in terms of various novel indicators. The preprocessing steps included radiometric adjustments designed to reduce variance due to the view angle and lunar illumination differences. The residual variance after the radiometric adjustments suggests the presence of a previously unidentified source of variability in the DNB observations of surface lighting. We believe that the short dwell time of the DNB pixel collections results in the vast under-sampling of the alternating current lighting flicker cycles. We tested 12 separate indices and looked for evidence of power instability. The key characteristic of lights in cities with developing electric power services is that they are quite dim, typically 5 to 10 times dimmer for the same population level as in Organization for Economic Co-operation and Development (OECD) countries. In fact, the radiances for developing cities are just slightly above the detection limit, in the range of 1 to 10 nanowatts. The clearest indicator for power loss is the percent outage. Indicators for supply adequacy include the radiance per person and the percent of population with detectable lights. The best indicator for load-shedding is annual cycling, which was found in more than half of the grid cells in two Northern India cities. Cities with frequent upward or downward radiance spikes can have anomalously high levels of variance, skew, and kurtosis. A final observation is that, barring war or catastrophic events, the year-on-year changes in lighting are quite small. Most cities are either largely stable over time, or are gradually increasing in indices such as the mean, variance, and lift, indicating a trajectory that proceeds across multiple years.
... However, with the excessive consumption of resources and the environment, it is bound to bring resource constraints, and the RECC reaches the upper limit, which makes it difficult to withstand rapid economic growth. Some scholars have researched the constraints of resources and the environment on economic growth (Andersen et al., 2013;Barbier, 1999;Eriksson, 2018). The continuous reduction of resources will cause their prices to rise, attracting a flood of investment. ...
The high-quality development of society needs the support of resource and environmental carrying capacity, and the improvement of resource and environmental carrying capacity is driven by the process of high-quality development. Therefore, how to realize the dynamic coordination of the two is an urgent problem to be solved. Different from previous studies which mainly focused on economic development and the environment, this paper considers all aspects of society and analyzes the interactive relationship between high-quality development and resource and environmental carrying capacity for the first time. Based on the panel data of 30 provinces in China from 2005 to 2020, a comprehensive evaluation index system is constructed, and the information entropy method, coupling coordination degree, and kernel density estimation model are applied to explore the coupling coordination relationship and spatial-temporal characteristics between resource and environmental carrying capacity and high-quality development. The results show that there are four nonlinear relationships between the resource and environmental carrying capacity and high-quality development, including simultaneous increase, first increase and then decrease, first decrease and then increase, and alternating fluctuation; Water resources per capita and the green coverage rate of the built-up area contributed the most to the resource and environmental carrying capacity subsystem, and GDP per capita and urbanization rate contributed the most to the high-quality development subsystem. From the time series, the coupling relationship between the two shows an upward trend over time. From the spatial series, the coupling relationship between the two is in a state of spatial aggregation. This paper discusses the results and puts forward policy recommendations, hoping to provide a reference for the coordinated development of the region. Moreover, this study provides a new perspective for the scientific construction of the relationship between resource and environmental carrying capacity and high-quality development on a global level.
... Individual country datasets are accessible at enterprisesurveys.org, to which researchers can register to get access to the data (EIB, 2021). Using microdata, scholars have produced plentiful academic papers on various topics, including energy and resources (Andersen & Dalgaard, 2013;Jain & Nandan, 2020;Montalbano & Nenci, 2019;Moyo, 2013;Zhang et al., 2020). ...
This study profiles manufacturing small and medium-sized enterprises (SMEs) in Eurasian countries regarding their practices of energy efficiency investments and energy management techniques. Given that the energy efficiency gap could be larger for SMEs because of the barriers identified in the related literature, the profiling of SMEs regarding their energy efficiency practices could help design specific policies that could be adopted for SMEs with a higher likelihood of insufficient energy efficiency investments. Advanced machine learning techniques, such as the random forest algorithm, enable us to perform such profiling. In profiling SMEs, the article uses the group enterprise survey collected by the European Bank for Reconstruction and Development-European Investment Bank-World Bank. The results of the random forest algorithm suggest that the most important input variable to identify the firm behavior to make an effort to enhance energy efficiency or adopt any energy management method is the sector of the firm, followed by firm size, number of skilled workers, the expertise of the top manager, and the firm’s experience. Contrary to the main findings in the literature, the firm’s ownership structure is the least important factor in forecasting its energy efficiency efforts. The elements of a clean energy strategy do not matter for efforts to enhance the energy efficiency, either. These results suggest that if policymakers in Eurasia were to design policies for manufacturing SMEs to make them invest more in energy efficiency, they should address smaller, younger enterprises with relatively less human capital when giving public subsidies.
... For instance, hours-long power outages or interruptions are daily events in numerous parts of the world. Namely, the frequency and prevalence of power outages are such that they significantly reduce the levels of economic activity, growth and everyday life in many developing countries (Andersen & Dalgaard, 2013;Cole et al., 2018). Our data source does not reflect the quality of electricity access and therefore we do not address for this issue. ...
Despite considerable improvements in electricity coverage, millions of people are still lacking the access to electricity. Residential electricity access is a prerequisite for numerous aspects of increased well-being and quality of life. The aim of this paper is to identify key household characteristics that are linked to the energy poverty measured as access to electricity. Literature on financial and general poverty showed mixed results on household size and characteristics as a driver of poverty. We argue that household size and proportion of children in households are key variables associated with energy poverty in developing countries with lowest levels of electricity coverage. Our research approach treats electricity access as economic good and focuses on demand side – households. By utilizing census microdata across 69 non-OECD countries, our research provides large-scale analysis on household size and characteristics as a driver of energy poverty. We found that, in majority of low-income countries, same principles for general or financial poverty apply to energy poverty which is represented by negative effect of household size and proportion of children on energy poverty.
... Prior economics literature evidences the severe negative impacts of electricity unreliability using a diverse set of approaches (Gertler et al 2017). Research ranges from the impact on gross-domestic product (Andersen and Dalgaard 2013), to businesses and industry (Moyo 2013, World Bank 2017, household incomes (Chakravorty et al 2014), and health (Adair-Rohani et al 2013, Burlando 2014). Literature on the willingness to pay for increased reliability, even in financially constrained environments, quantifies the value that households and businesses place on reliability (Graber et al 2018, Amoah et al 2019, Jacome et al 2019, Zemo et al 2019. ...
The United Nations identifies ensuring “access to affordable, reliable, sustainable and modern energy for all” as one of its Sustainable Development Goals for 2030. This article focuses on the comparatively under-investigated question of reliability within the broader goal. We empirically study experienced household electricity reliability using common frameworks in key countries such as Tanzania, Kenya, and India. Datasets represent a diverse set of technologies including solar home systems (SHS), solar pico-grids, and national electricity grids. First, the prevailing reliability metrics - SAIDI and SAIFI – are measured for all datasets. Informed by critical assessments, this article then proposes a suite of new metrics that facilitate improved reliability comparisons by considering the reasons, timing, and fairness of outage distribution. Analyses using our proposed metrics reveal key policy implications for addressing energy poverty in the Global South. Acknowledging that the systems studied provide different capacity, affordability, and carbon footprints, we find that on average, SHS provided comparable hours of lighting to local grid connections, however SHS outages were less equally distributed than those from other sources. In addition, calculations of grid reliability were highly sensitive to measurement techniques and assumptions used, necessitating high resolution data for policy decisions. Finally, economically driven outages conspicuous in pre-paid SHS systems (i.e., disconnections for non-payment) composed a significant portion of experienced unreliability. These findings quantify the important contribution of demand-side affordability to experienced household reliability, thereby allowing for a comprehensive understanding of the reliability of SDG 7.
... The analysis of regional power consumption as depicted in figure 2 further suggests the SSA region suffers from power poverty that limits SMEs growth and innovation potential (Iyke, 2015), as electricity shortages adversely affects manufacturing firm's productivity and innovation capabilities (Allcott et al., 2014). Andersen & Dalgaard (2013) suggest there is an inverse relationship between power shortage and firm's productivity. These findings are considered applicable to SSA economies as power outage affects firm revenue and job creation (Mensah et [ INSERT FIGURE 2] Studies have examined the relationship between green energy and growth for Western economies (Bulut & Muratoglu, 2018) and demonstrated that green energy consumption leads to increased productivity (Rath et al., 2019). ...
Does the cost of energy matter for innovation? The effects of energy prices on SME
innovation in Sub-Saharan Africa
Purpose – Energy and environment has gained traction within the field of entrepreneurship literature but a comprehensive empirical study that examines the relationship between the cost of energy and small and medium sized enterprises (SME) innovation is an omission. Therefore, this novel study examines the relationship between the cost of energy and SMEs innovation in Sub�Saharan Africa (SSA) by first examining the differential impact of the various generation sources on the price of electric energy. This research has enabled us to investigate and understand the transmission mechanism of increasing/decreasing electricity price on innovation decisions and activities of SMEs in SSA.
Design/methodology/approach – Using quantitative approach, with the data from the World Bank Enterprise and Innovation Follow-up Surveys, the study utilises a Tobit model to test whether the generation mix (renewable and non-renewable generation sources) increases or decreases electricity prices and examine the impact of the cost of electric energy on SMEs innovation in Sub�Saharan Africa.
Findings – The findings of this study shows that cost of electricity affect negatively on SMEs innovation decision and activities of SMEs in SSA. The impact of renewables on price of electricity has a larger magnitude relative to that of non-renewables. This finding has implications for policy makers promoting renewable energy without a policy design to tackle the unintended price effect of promoting renewable energy.
Originality/value – This is the first study to introduce cost of energy into an innovation model and to empirically examine the role of cost of energy for innovation activities of SMEs in SSA. Further, it examines the sources of generation on electricity price in SSA. The study contributes towards the empirical literature and the findings also have implication for policy makers regarding the unintended consequences of promoting the transition to low carbon electricity generation sources on SMEs via the cost of doing business implication
... While Africa is exhibiting these new trends its economy is still facing several challenges and problems among them employment and energy security. For example, while Nigeria is one of the biggest producers of energy in the continent, it faces strong problems in creation of jobs and provision of energy (Andersen and Dalgaard, 2013). Energy provision is fundamental for economic and social development. ...
... [45] has conducted a thorough review of risk-based methods for energy system planning. Some studies focus on the effect security issues might have on electrification efforts in developing economies [46][47][48][49][50][51][52][53][54]. However, only a handful of them have looked into fragile states [8,27,55,56]. ...
... The subject of electricity supply (un)reliability receives limited attention [5]. Additionally, the few studies about electricity unreliability/outages in Africa addressed the impacts on business firms and the economy [7][8][9][10], while electricity outages in households were rarely investigated. The research presented here aims to fill this knowledge gap by assessing the impacts of electricity outages in urban households in developing countries using a case study of Accra, Ghana. ...
Many developing countries in Africa face a "double tragedy" when it comes to electrification. Electricity access rates are low, while those who have access to electricity face frequent outages. There are ongoing efforts aimed at increasing access to electricity on the continent. However, the need to improve the reliability of electricity supply receives limited attention. Unreliable electricity impacts users by limiting electricity utilization and the benefits that should accrue from having an electricity connection. Using data from 496 household survey questionnaires, this study examines the impacts of electricity outages in urban households in Accra, Ghana. The study applies correlation and regression analyses to identify which household characteristics are associated with or predict households reporting outage impacts. Outages were found to impact household safety/security, access to food, and access to social services and were found to cause appliance damage as well. Factors that are significantly correlated with reporting certain outage impacts include respondent's annual income and employment status, frequency of electricity outages, and household size. Significant predictors of reporting outage impacts are socioeconomic disadvantage, high exposure to outages, and living in a large family setting. The study's findings underscore the need for interventions to eliminate, or at least minimize, electricity supply interruptions in developing countries if sustainable social and economic development is to be achieved.
... The positive relationship between ESQ and output has been tested by several studies. The authors in [24] use a parsimonious model and employ lightening density as an instrument to estimate the impact of outages on the economic growth of 39 countries in sub-Saharan Africa, indicating that a one percent increase in outages reduces long-run GDP per capita by 2.86%. A cross section analysis in 80 economies using World Bank Enterprise Surveys data suggests that power outages and electricity tariffs are negatively associated with firm-level productivity; especially, for a 1% increase in the total duration of power outages, productivity is expected to decrease by 0.10% at the firm level and by 0.07% at the industry level [25]. ...
Electricity supply quality (ESQ) is critical for healthy economic production, and regional differences in ESQ can widen economic development gaps. To contribute to a more equitable regional development, this study first develops a Gini index of ESQ distribution to measure the inequality among different cities. Then, an econometric model based on the Cobb–Douglas production function is established to quantify the effects of ESQ on regional economy. Finally, we estimate the impacts of ESQ improvement on reducing the economic inequality. The main results show that: (1) Substantial differences exist among the regional ESQ, and the national GDP-based ESQ Gini index was 0.720 in 2018. (2) A GDP-based Lorenz curve has a higher Gini coefficient than the population-based one does, while inequalities in cites are greater than those in rural areas. (3) The ESQ has significant impacts on the regional economic output, and a 1% reduction in the ESQ will, on average, reduce the city-level output by 0.142%. (4) ESQ improvement can significantly narrow the economic gap by up to 24.9%, that is, the ESQ Gini index of GDP distribution will decrease from 0.329 to 0.247 according to our scenario designs.
... Atems and Hotaling [22] stressed on the harmonizing relationship between renewables and fast reacting fossil fuel on economic growth, this is necessary as non-renewables serve as back-ups for renewable sources which often times are intermittent in nature. In their investigation, Andersen & Dalgaard [23] showed that every 1% increase in power outages, correspondingly, decreases Gross Domestic Product (GDP) by 2.86% in sub-Saharan Africa. They further proposed that the average GDP of the continent of Africa can be increased by 2% if all African nations experience the South Africa's power quality. ...
Globally, demand for electricity has seen a steady increase, with nations striving to meet the demand. However, Nigeria is abysmally struggling to meet the increasing demand with the meagre per capita electricity consumption of 151 kWh, which is lower than the average of per capita electricity in Africa. Presently, the grid-tied electricity installed capacity in Nigeria, estimated at 13,435 MW is primarily generated by fossil and hydro-power plants at approximate distribution of 82.3 % and 17.7 %, respectively. This work presents single capsule that shows a holistic narrative of the energy access sector in view of energy penetration, sustainability, technology advancement and energy policy evolution. From available records, renewable energy sources in Nigeria are equitably distributed throughout the country, unlike the fossil reserves that are mostly concentrated in the south-south geopolitical zone. Also, there are huge potentials buried within untapped renewable energy in the country, namely wind, small-scale hydropower, geothermal, tidal and biomass energy. Furthermore, cutting edge power generation technologies that incorporate fuel cell, gas-, steam-, and low grade-turbine with carbon capture and fired by dual fuel of natural gas and biomass is promising for both energy access and climate action. The Federal Government of Nigeria’s friendly energy policies, coupled with political will to excite implementation are panacea to significantly drive energy access for sustainable socio-economic development.
... It is estimated that 264-people on average die from lighting strikes in South Africa every year [4]. Further, lightning is responsible for about twenty-percent of all outages of electrical distribution in South Africa [5]. Knowing when lightning will occur, will help reduce human loss and assist in planning for expected lightning damage. ...
... Electricity supply relates directly to economic growth. Research conducted by Andersen and Dalgaard [4] suggests that gross domestic product (GDP) growth rates in sub-Saharan Africa are held back by 2 percentile points because of weak electrical infrastructure, with the current GDP of South Africa being 17% [5]. The threat of future load shedding and the accompanying lack of economic growth led to the South African government to announce the Integrated Resource Plan (IRP) in 2010 [6]. ...
The existing processes that determines the yield of a photovoltaic (PV) system before construction commences are fairly unstructured. Research that defines a structured process for simulation purposes is limited. This article builds on prior research where a proposed structured pre-assessment process, which may be applied before construction commences, was generated so that electricity yield from a PV system can be predicted with a higher degree of accuracy, and then subsequently optimized. By implementing the proposed pre-assessment process, calculating the future return on investment (ROI) by private investors is simplified, given that the existing process is restrictive. The research used the results from a South African case study over 24 months to ascertain the validity of the proposed pre-assessment process. The validation process includes analyzing the load demand of the shopping centre before and after the PV system was constructed, comparing the electricity yield from the PV system to the simulation results obtained in the preceding research, and amending the proposed pre-assessment process accordingly for improved electricity estimation. The case study shopping centre operates in Johannesburg, Gauteng, and consumes approximately 5000 kVA under maximum load.
... They estimate that an additional average daily hour of unexpected power outages decreases a firm's annual revenues by 10%, decreases annual value-added at the firm level by 20%, and increases the labor share of output. These impacts highlight the significant role of having access to reliable power infrastructure on economic growth (Andersen and Dalgaard 2013). ...
Employing two complementary pieces of information from a nationally-representative sample of grid-connected consumers in Nepal - revealed coping behavior and stated willingness to pay (WTP) - this paper analyzes the demand for electricity reliability. First, ex-ante WTP values are estimated for households and firms under different electricity tariff categories. The results indicate substantial heterogeneity in needs and preferences for electricity reliability across and within residential and non-residential tariff categories. The obtained WTP values are then regressed on a set of household- and firm-level observable characteristics to determine the predictors of demand for reliability. Third, predictions by ex-ante WTP estimates are validated using ex-post changes in electricity consumption levels due to countrywide reliability improvements in Nepal. For policy-making purposes, the findings highlight the importance of conducting a detailed analysis of households' preferences and firms' opportunity costs when evaluating the costs and benefits of electricity reliability investments.
... In order to estimate the induced productivity effects -i.e., through fewer outages and more stable electricity supply 9 -we estimate the production function of the manufacturing sector in Uganda, which consumes the majority of electricity in Uganda. Various survey studies (World Bank, 2013) and econometric assessments underscore (Alam, 2013;Andersen & Dalgaard, 2013) that outages have a detrimental effect on productivity, even though specific assessment for Uganda are still lacking. ...
Effectively mitigating climate change entails a quick upscaling and redirection of electricity infrastructure investment towards clean power. Given that the bulk of greenhouse gas emissions increases until 2050 will come from low- and middle-income countries, finding cost-effective ways to mitigate climate change while meeting development targets is essential. However, recent research has shown some of the limitations of broad financing mechanisms, such as the Clean Development Mechanism (CDM) and existing carbon markets. This has resulted in a growing interest in designing novel investment support schemes, such as modifications of feed-in tariffs (FiTs) that may be more cost effective and better targeted towards particular outcomes when compared to traditional deployment subsidies or broad financing mechanisms. We evaluate the design and outcomes of one such novel support schemes: the GET FiT (Global Energy Transfer Feed-in Tariff) investment support scheme in Uganda, which has attracted ~ 453 million USD in private sector investment for 17 small-scale renewable energy projects (solar, hydro, bagasse) in only three years. Using financial modelling on detailed project-level data, we find that most projects were additional and would therefore not have been built without the subsidy. In addition, using firm-level panel data, we show that power outages hamper manufacturing performance in Uganda. In the absence of reliable outage-data for the entire Ugandan territory, we use nightlight variations to proxy changes in outages. We show that outages have declined substantially since the introduction of GET FiT. Yet, our analysis also demonstrates that programmes to incentivise additional renewable generation in developing countries funded internationally or domestically should liaise closely with grid authorities to ensure that supply does not outstrip demand.
... The World Bank (2017) (Moyo, 2013) they also slowed down economic growth generally on the continent (Andersen & Dalgaard, 2013). ...
... The reality, however is that, despite the fact that more than 600 million people in Africa lack access to electricity (IEA, 2015), the quality of supply to connected households and firms is precarious. Electricity outages have become a common feature in many African countries (Andersen and Dalgaard, 2013). ...
... But access to infrastructure systems is insufficient if their unreliability hinders production and reduces output. In Africa, studies at the firm-and the country-level illustrate the severe consequences of disrupted electricity infrastructure: increasing the frequency of power outages by one percent is estimated to decrease firm output by 3.3 percent in the short run and reduce GDP per capita by 2.9 percent in the long run (Andersen & Dalgaard, 2013;Mensah, 2018). Similarly, disruptions to the water supply and congestion in transportation infrastructure have been shown to decrease economic output (Iimi, 2011;Islam & Hyland, 2018;Sweet, 2011Sweet, , 2013World Bank, 2013). ...
... The relationship between power outages and foregone economic activity is not only visible at the firmlevel, but also on a country-wide scale. Andersen and Dalgaard (2013) estimate the impact of power outages on economic growth at the country-level for Sub-Saharan African countries. Using nightlight brightness and lightning strikes as control variables, they estimate that an increase in outages by one percent reduces GDP per capita in the long run by 2.86%. ...
... including factors such as trade openness (Beck, 2002;Alfaro et al., 2004), changes in rm dynamics (Arellano et al., 2012), and improvements in institutional quality (Rajan and Zingales, 2003;Chinn and Ito, 2006). We also complement studies that examine the eects of electrical outages (Allcott et al., 2016;Andersen and Dalgaard, 2013;Fisher-Vanden et al., 2015), expanded access to electricity and telecommunications technologies (Jensen, 2007;Dinkelman, 2011;Rud, 2012), improvements in infrastructure (Bougheas et al., 2000), and investment in private generators on industrialization, productivity, and rm-level business decisions (Steinbuks and Foster, 2010;Alby et al., 2013). One particular contribution of our paper is the combination of rm-level data with a substantial cross-country analysis. ...
We explore variations in access to energy and telecommunications improvements across firms in 57 and 112 developing countries, respectively, between 2002 and 2014, and nd that national investments in technological infrastructures provide a channel through which financial development promotes firm-level adoption of tangible innovations. In particular, when countries make large investments in their energy (electricity and natural gas) and telecommunications infrastructures, firms with greater access to financial resources are better positioned to benefit from these investments, experiencing significantly fewer power interruptions, more adoptions of power generators, and greater website use, all of which are related to higher firm-level growth in sales and employment.
This paper employs a multi‐asset allocation framework to analyse the short‐term and long‐term desirability of listed infrastructure investments in an investor's portfolio. We employ 14 infrastructure indices encompassing six regions and eight sectors. The asset menu of the investor comprises traditional financial asset classes (stocks, bonds and bills) and infrastructure. We calculate the welfare losses due to ignoring the demand for infrastructure for various levels of risk aversion. In addition, we calculate the portfolio weights across various levels of risk aversion. Our results show that infrastructure is a desirable addition to the portfolio of traditional financial asset classes for both short‐run and long‐run investors.
The power sectors in most African countries face an enduring problem of poor utility performance - electricity utilities have failed to deliver adequate, reliable, and competitively priced electricity to support economic growth and improve the welfare of their populations. Despite more than two decades of power sector reforms, outcomes have been varied and often disappointing. Using a case study design, we explore the five key enduring power challenges: inadequate generation capacity; low access to electricity; unreliable supply; high cost of power, and poor performance of utilities in Uganda. The paper utilizes a powerful analytical approach that combines power sector reform theory and principal-agent theoretical lens to explore the experience of power sector reforms. Empirical findings show that the depth and extent of reform adoption have been deepest due to the leadership of the President and technocrats. The Umeme concession has achieved strong financial performance: viability and sustainability - largely underpinned by embedded contractual and regulatory incentives as well as strong governance systems buoyed by listing on the securities exchange which introduces a strong discipline around private capital. However, there has been disappointing progress in the affordability of tariffs, and access - one of the oversights in the design of the concession. One of our major conclusions is that concessions, if well designed to suit local country conditions and when well managed and consistently supported by all stakeholders can be successful in turning around utility performance. Overall, the Uganda concession has demonstrated the power of agency in delivering efficient services especially when a clear, well-articulated contractual relationship exists with principals and when proper incentives are allocated to cover existing risks.
Universal electrification may be a necessary but not sufficient condition for reliable electricity supply. Yet countries that have achieved universal electrification have made significant investments in building reliable electricity infrastructure relative to countries with low electrification rates. We examine the relationship between power outages and firm performance in four middle-income countries with universal electrification. Using data from the World Bank Enterprise Survey on over 8,000 firms from 39 regions across Egypt, Morocco, Tunisia, and Indonesia, we find no discernable negative association between outages and firm performance in two of three different specifications we employ. There is also some cross-country heterogeneity; we find that outages are associated with lower sales for firms in Tunisia in our main specification. However, these results for firms in Tunisia are not robust to other specifications with value added and total factor productivity as explained variable. Overall, our results are mixed, showing either a nonexistent or weak negative relationship between power outages and firm performance. These findings suggest that universal electrification is an important development goal, and while universally electrified countries may suffer some outages— which are fewer relative to those in low-electrification countries, firms in universally electrified countries are able to adapt to the remaining problems of reliability without incurring significant productivity losses.
This research examines assumptions about the relationship between e-governance and governance in 15 West African countries through an analysis of the 2016 and 2018 World Governance Indicators (WGI) and E-government Development Index (EDGI), proxies for governance and e-governance, respectively. A Pearson correlation analysis demonstrates a significant positive correlation between WGI and EDGI. When disaggregated, however, some dimensions of governance fail to correlate with e-governance. Notably, governance indicators correlate positively with each other thus reinforcing the critical role of traditional institutions of governance in achieving good governance. The study concludes that while ICTs are effective in advancing the goals of governments, they achieve better outcomes when integrated with established institutions and structures of governance. It advances an understanding of the concepts of development and governance by providing empirical evidence of the prospects and limitations of ICTs in the administrative practices of governments, especially in geopolitical contexts of limited resources.
Understanding the scale of energy poverty remains elusive. It is, however, a key metric in the global effort to eradicate poverty. The analysis presented in this paper provides insights into the true scale and impacts of unreliable electricity service provision. The paper introduces a simple and novel approach to quantifying the difference between electricity supply and demand, accounting for both met and unmet demand in Sub-Saharan Africa (SSA). To assess unmet demand, generator use, reduced utilization due to unreliable electricity service, unrealized demand from unelectrified households, and the effect of tariff reductions are considered. We find that at 2018 prices, SSA (excluding South Africa) on-grid power networks had annual unmet demand of 8.83 TWh for on-grid users and 42.9 TWh with the inclusion of the off-grid sector. With a 50% reduction in tariff by country, the on-grid power sector would face a 21.46 TWh of unmet demand in the region, rising to 55.53 TWh with the inclusion of off-grid.
Public utilities in most African countries have failed to deliver adequate, reliable, and competitively priced electricity to support economic growth and improve the welfare of their populations. Despite more than two decades of power sector reforms, outcomes have been varied and often disappointing. A comparative case study analysis of electric utilities in three East African countries (Tanzania, Kenya, and Uganda) explores the drivers of utility performance. Findings show that Tanzania Electric Supply Company Limited performed the worst. Kenya Power performed better, while Umeme is the most financially sustainable of the three utilities. However, this ranking among the three utilities is inconsistent across all performance measures. PSP is widespread and brings in much-needed investments in generation and distribution. Countries that restructured their power systems have reduced conflicts of interest, enabled deeper management focus, improved transparency and accountability, and built institutional capacity that translates into improved utility performance. One of our major conclusions is that despite improved governance in market-oriented power markets, consistent regulatory decision-making for cost-reflective tariffs and adequate indexation is still necessary to guarantee financial viability and sustainability.
At the end of 2014, South Africa was unexpectedly required to implement load shedding, which is electricity blackouts aimed at relieving strain on the electrical grid. Soon after, it was revealed that the nationally owned power company, Eskom, had been neglecting infrastructure maintenance and that the people should expect load shedding to continue for many more years. The article considers the prevalence of fires as a potential consequence of load shedding. In addition to power surging that increases fire risk, this article investigates changes in household energy consumption as a mechanism by which load shedding would increase house fires. After load shedding started, there is evidence that households substituted away from using electricity to alternative energy sources for cooking and lighting that have increased fire risks. Using a novel data set, this article exploits plausibly exogenous variation in the timing and spacing of load shedding, estimates show that likelihood of residential fires increases when load shedding occurs in an area.
One of the secrets for China's economic growth miracle is continuous investment in infrastructure, and the role of power infrastructure is irreplaceable. However, previous studies mostly focused on generation-side indicators rather than grid-side indicators, ignoring the importance of the mega-grid established in China. As a result, this paper is committed to exploring the economic growth pulling effect of power grids with different voltage levels in the nonlinear framework. On the premise of determining the robustness of estimation parameters by instrumental variable method, the panel smooth transition regression (PSTR) model is used to capture panel heterogeneity. To be exact, the regional economic growth driven by extra-high voltage (EHV) and ultra-high voltage (UHV) power grids presents a regime transition accompanied by the growth of regional power generation and electricity consumption per capita. This means that the mega-grid is more conducive to the economic growth of energy bases and load centers. To further build and improve the state-leveled mega-grid into a nationwide basic platform for trans-regional renewable energy transmission and distribution is a key measure to enhance China's sustainable economic growth under the constraints of carbon peak and carbon neutrality targets.
In the West Cameroon region, agri-food establishments: bakeries, fishmongers and restaurants contribute to three quarters (3/4) of employment in the towns, turnover and added value of regional businesses. These are also the sectors that consume the most electrical energy; between them, these establishments account for more than 50% of the electrical energy consumption in the entire Western region of the country. For six months, we conducted the study in (5the) major towns of West Cameroon chosen at random (Mifi, Menoua, Bamboutos, Nde and Haut-Nkam). Field observations of recurrent power cuts and surveys of local policy makers were also conducted on the supply of electricity, which remains problematic throughout the country. Our results show that the average electricity consumption per establishment is particularly high in bakeries, at around 1441.67 KWh, compared to 1295.45 KWh for fishmongers and 371.21 KWh for restaurants. Electricity is mainly used as a driving force for thermodynamic purposes (cold rooms, deep-freezing and air-conditioning of engines in bakeries, etc.). On the other hand, it should be noted that this sector of activity faces enormous difficulties, including the inadequacy of electrical energy in terms of supply, access and quality. The electricity supplied by The Energy of Cameroon (Eneo) is still very inadequate given the high demand. It is precarious and characterised by untimely power cuts. In fact, the average power cut in the cities studied is 24 days and 20 minutes, for a period of six months. We have come to the effective conclusion that recurrent power cuts are the result of a poor electricity supply and have a significant impact on the agri-food activity, due to their dependence on this source of energy. All these problems in West Cameroon indicate that energy demand will have to increase considerably in the coming years due to population growth (+7.8%) and socio-economic development. Therefore, we believe that policy makers should turn to renewable energies which are natural energy sources such as solar and wind power. In addition, local elected officials should think about building more mini hydroelectric dams in villages to reinforce urban areas with electrical energy.
We examine the relationship between different types of power investments and regional economic dynamics. We construct a novel panel dataset combining data on regional GDP and power capacity additions for different technologies between 1960 – 2015, which covers 65% of the global power capacity that has been installed in this period. We use an event study design to identify the effect of power capacity addition on GDP per capita, exploiting the fact that the exact amount of power capacity coming online each year is determined by random construction delays. We find evidence that GDP per capita increases by 0.2% in the 6 years around the coming online of 100 MW coal-fired power capacity. We find similar effects for hydropower capacity, but not for any other type of power capacity. The positive effects are regionally bounded and stronger for projects on new sites (green-field). The magnitude of this effect might not be comparable to the total external costs of building new coal-fired power capacity, yet our results help to explain why policymakers favor coal investments for spurring regional growth.
Lightning is one of the leading causes of electrical outages in South Africa, and the most severe weather-related killer in the country. Unfortunately for risk management, quantitative lightning prediction remains challenging. In this study, we evaluate the accuracy of LSTM neural network model variants on thunderstorm severity using remote sensing weather data. These LSTM model variants are LSTM-FC, CNN-LSTM, and ConvLSTM variants. The CNN-LSTM and ConvLSTM models recognize spatio-temporal features, which assist processing. The data used consists of lightning detection network (LDN) data from the SALDN and weather-feature information from the network of weather stations operated by the SAWS. We forecast thunderstorm severity every hour, as quantified by lightning flash frequency, between December-2013 and March-2016 for North-Eastern South Africa. Models were trained on data between July-2008 and November-2013. All models minimized MSE but evaluated on mean absolute error (MAE flashes.hr
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). We also varied models based on input datasets: SALDN-only, SAWS-only, and SALDN+SAWS datasets. We found the CNN-LSTM model (MAE=51) performed best among LSTM model variants (LSTM-FC MAE=67; ConvLSTM MAE=86). When models were evaluated between input datasets, we found that SALDN only (MAE=59) outperformed SAWS only and SALDN+SAWS (SAWS MAE=74; SAWS+SALDN MAE=70). We conclude that CNN-LSTM models outperform prediction accuracy compared with ConvLSTM and LSTM-FC models but consideration on input data is required.
Developing countries suffer from shortages of electricity, posing a severe problem for industrial firms and giving them considerable incentives to access electricity resources through bribery. We investigate how firms’ revenues, sales and productivity are affected by payments of bribes to obtain electricity connections. We use ordinary least squares (OLS), quantile and instrumental variable (IV) quantile regression analysis. OLS estimates reveal a negative effect on sales and productivity and a positive impact on profitability, while quantile regression suggests a negative effect on sales across all quantiles and a positive effect on productivity at the lower quantile. Since this research shows that bribery may negatively influence productivity, it informs shareholders that bribery may be detrimental to their long-term benefits.
E-waste which can be defined as discarded electronic products contains extremely hazardous materials such as Lead, cadmium etc. In Bangladesh, almost 2.7 million metric tons of e-waste generated per year.E-waste and its reuse and recycling processes can cause significant environmental and health hazards.The current practices of e- waste recycling in Bangladesh suffer from a number of drawbacks. No such factory was setup for recycling because of strategic collection of e-wastes and without regular collection
a factory will face losses. Thus, the present informal practice of recycling is not carried out safely and it becomes a danger to human health and the surrounding environment. This paper highlights on strategic method of e-Waste management, collection and selling to the recyclers. It also describes the present dumping practices and what rules are in place for dumping and how futuristic dumping practices can be introduced. Therefore, this paper also suggest that e-waste collection & recycling may require a more customized approach and it should get more preference with municipal solid waste. A comparison of ewaste management framework is also provided emphasizing on e-waste collection.
This paper analyzes the 2018 Logistics Performance Index (LPI) from the World Bank to determine the spatial effects of countries’ logistics performance. Although the standardized ordinary least square (OLS) models show good results, the spatial lags and Moran’s I of LPI suggest the OLS assumptions are violated. Consequently, an improved geographically weighted regression (IGWR) model using multivariate kernel functions (MKF) is implemented. Through the analysis of the Moran scatter plot, the authors identified the countries that have different logistics performance development trends in the four quadrants representing the relationship between the spatial lags and the LPI. Using trade activity (i.e., import/export) in the MKF, the authors compared different MKF types and bandwidths to ensure the model’s predictability and accuracy and found that the adaptive Gaussian MKF is suitable. Finally, the IGWR model indicates both positive and negative influencing factors on LPI overall score. Specifically, the improvements of LPI are more associated to economic variables in mid- and low-income countries around the world, and are more related to import of construction equipment in the Middle East. Also, business environment is more important in Latin America and the Pacific. European countries are more sensitive to customs efficiency, whereas Pacific-Asian countries are more sensitive to quality of infrastructure and have higher coefficients than African and American countries. This spatial heterogeneity is related to the specific factors that promote the development of their logistics performance.
As household electrification rates continue to increase globally, the focus in energy access planning is increasingly shifting towards quality of service. To inform this planning, we explore changes in household electricity and people's use and satisfaction with their service over time in rural India. Fielded in 2015, the ACCESS survey collected data on energy access from more than 8,500 households living across six Indian states. In 2018, the same households were re-surveyed. Using this longitudinal dataset, we sketch the changes in electricity access that took place during these three years. We find that access and the quality of supply have both improved substantially, with a 17 percentage points increase in electrification rates (95% CI: [15,19]). However, a large minority (about one fifth) remains unsatisfied with its electricity access. People's satisfaction levels were more sensitive to the quality of supply in 2018 compared to 2015. We propose that this change is a result of evolving expectations of electricity services that are offered. As households climb electricity access tiers and acquire more and larger electric appliances (such as fans or TVs), their demands increasingly shift from focusing on the extensive margin of supply to its intensive margin.
Global kuruluşlar tarafından gerçekleştirilen endeksler konularına göre ülkelerin finansal, ekonomik, sosyal, beşeri, askeri vb. kapasitelerine dair tespit, gözlem ve analizler gerçekleştirmek amacıyla yapılmaktadır. Bu endekslerin her biri alanında uzmanlaşmış kuruluşlarca hazırlanan ve bu kuruluşların çeşitli paydaşları vasıtasıyla derledikleri verilerden oluşmaktadır. Değerlendirmeyi yapan kuruluşlar ele aldıkları konulara göre değişen yöntemler/kriterler kullanmaktadırlar. Araştırılan konuya göre endekslerden elde edilen sonuçlar öngörülebilir gelecekle ilgili ipuçları vermektedir.
Uluslararası kuruluşların gerçekleştirdiği önemli endekslerden biri de İş Yapma Kolaylığı Endeksi’dir (Doing Business). Dünya Bankası tarafından 2003 yılından beri her yıl hazırlanan “İş Yapma Kolaylığı Endeksi”nde; 190 ülkedeki (2020 yılı itibariyle) yerel şirketlerin iş yapma ve kurma kolaylığı ile iş yapmalarını etkileyen bir dizi düzenlemeler 11 gösterge seti çerçevesinde mercek altına alınmaktadır.
Bu çalışmada Afrika kıtasının en gelişmiş ve aynı zamanda da en büyük ekonomilerinden biri olan Güney Afrika’nın Doing Business Endeksi’ne göre 2016-2020 döneminde, dünyadaki ve bölgedeki durumu analiz edilip değerlendirilerek ileriye dönük öneriler yapılmaya çalışılmıştır.
Anahtar kelimeler: Uluslararası endeksler, Doing Business Endeksi, Güney Afrika
The increasing penetration of intermittent renewables and the accelerated climate change are challenging the power system operation in China, and understanding the cost of reducing power outage durations is essential in supporting the equipment maintenance, infrastructure investments and regulation policies. Therefore, this study first uses production theory combined with a parametric distance function approach to estimate the marginal costs (MCs) of reducing power outage durations by 1 h. Then, we establish a fixed-effects panel data model to investigate the impacts of different environmental factors on the estimated MCs. Finally, the estimated MCs are applied to the evaluations and designs of interruption compensation prices in the demand response mechanism. The significant findings are that: (1) The national MC shows an increasing trend during the period from 2002 to 2017 in China, ranging from 1.27 billion yuan/hour to 11.63 billion yuan/hour. (2) The MCs vary substantially among different provinces, and provinces with better reliability levels will have higher MCs. (3) The current compensations for power outages are only about 6% to 61% of the estimated MCs, indicating that grid companies would like to pay for the compensations rather than to enhance the system reliability from the supply side.
Inadequate and unstable power supply constitute a major constraint to industrial production in Cameroon. This paper evaluates the long-term impact of power deficits on the country's manufacturing growth, using a Fully Modified Ordinary Least Square Method, and selected data from 2016 World Development Indicators, covering the period 1977–2014. For each variable used in the estimations, only data for Cameroon was retrieved for the period under study. The findings reveal that there is a strong and positive correlation of 0.904256/1 between power supply and manufacturing growth in the long-term. Moreover, a percentage decrease in electricity supply reduces annual manufacturing growth and gross capital formation by 0.07% and 0.28% respectively. Furthermore, Foreign Direct Investment inflows augment manufacturing value added by 0.39% yearly. It is recommended that: first, the government of Cameroon should increase its investments in the energy sector to boost power supply by 10% annually, in order to raise manufacturing growth by 0.7% in a year and 7% in a decade. Secondly, incentives to encourage private investments in the energy sector should be put in place to spur power production and supply. Overall, the findings imply that power supply must remain at the epicenter of economic and industrial policies in Cameroon.
The demand for energy has been increasing over the years in India, which may be the result of its rapid economic growth trajectory. In this context, this study examines the direction of the Granger-causal relationship between electricity consumption and economic growth at the state and sectoral levels in India. In doing so, the panel cointegration tests with the structural break, the heterogeneous panel causality test, and the panel VAR based impulse-response model are employed. The study covers overall economic growth and growth in agricultural and industrial sectors for eighteen major Indian states for the period 1960–61 to 2014–15. The results provide evidence in support of a long-term relationship between economic growth and electricity consumption only in the agriculture sector. Further, the results provide evidence for the presence of unidirectional Granger-causality flowing in the direction of overall economic growth to electricity consumption at the aggregate state level. However, at the sectoral level, there is a unidirectional causal relationship running from electricity consumption to economic growth for the agriculture sector, and economic growth to electricity consumption for the industrial sector.
We test the hypothesis that the Internet is a useful technology for controlling corruption. In order to do so, we develop a novel identification strategy for Internet diffusion. Power disruptions damage digital equipment, which increases the user cost of IT capital, and thus lowers the speed of Internet diffusion. A natural phenomenon causing power disruptions is lightning activity, which makes lightning a viable instrument for Internet diffusion. Using ground-based lightning detection censors as well as global satellite data, we construct lightning density data for the contiguous U. S. states and a large cross section of countries. Empirically, lightning density is a strong instrument for Internet diffusion and our IV estimates suggest that the emergence of the Internet has served to reduce the extent of corruption across U.S. states and across the world.
Empirically, a higher frequency of lightning strikes is associated with slower growth in labor productivity across the 48 contiguous US states after 1990; before 1990 there is no correlation between growth and lightning. Other climate variables (e.g., temperature, rainfall and tornadoes) do not conform to this pattern. A viable explanation is that lightning influences IT diffusion. By causing voltage spikes and dips, a higher frequency of ground strikes leads to damaged digital equipment and thus higher IT user costs. Accordingly, the flash density (strikes per square km per year) should adversely affect the speed of IT diffusion. We find that lightning indeed seems to have slowed IT diffusion, conditional on standard controls. Hence, an increasing macroeconomic sensitivity to lightning may be due to the increasing importance of digital technologies for the growth process.
We develop a statistical framework to use satellite data on night lights to augment official income growth measures. For countries with poor national income accounts, the optimal estimate of growth is a composite with roughly equal weights on conventionally measured growth and growth predicted from lights. Our estimates differ from official data by up to three percentage points annually. Using lights, empirical analyses of growth need no longer use countries as the unit of analysis; we can measure growth for sub- and supranational regions. We show, for example, that coastal areas in sub-Saharan Africa are growing slower than the hinterland. (JEL E01, E23, O11, 047, 057)
This paper estimates the impact of electrification on employment growth by analyzing South Africa's mass roll-out of electricity to rural households. Using several new data sources and two different identification strategies (an instrumental variables strategy and a fixed effects approach), I find that electrification significantly raises female employment within five years. This new infrastructure appears to increase hours of work for men and women, while reducing female wages and increasing male earnings. Several pieces of evidence suggest that household electrification raises employment by releasing women from home production and enabling microenterprises. Migration behavior may also be affected. (JEL H54, L94, L98, O15, O18, R23)
The article models the transition from a hunter–gatherer economy to agricultural production, a crucial event in history which made possible the endogenous technological progress that ultimately led to the Industrial Revolution. We further present evidence showing that geographic and initial biogeographic conditions exerted decisive influence on the location and timing of transitions to sedentary agriculture, to complex social organization and, eventually, to modern industrial production. Evidence from a large cross-section of countries indicates that the effects of geography and biogeography on contemporary levels of economic development are remarkably strong, a result that contrasts with several recent studies where the effect runs solely through institutions.
Does economic development depend on geographic endowments like temperate instead of tropical location, the ecological conditions shaping diseases, or an environment good for grains or certain cash crops? Or do these endowments of tropics, germs, and crops affect economic development only through institutions or policies? We test the endowment, institution, and policy views against each other using cross country evidence. We find evidence that tropics, germs, and crops affect development through institutions. We find no evidence that tropics, germs, and crops affect country incomes directly other than through institutions, nor do we find any effect of policies on development once we control for institutions.
Per capita income in the richest countries of the world exceeds that in the poorest countries by more than a factor of 50. What explains these enormous differences? This paper returns to two old ideas in development economics and proposes that linkages and complementarity are at the heart of the explanation. First, linkages between firms through intermediate goods deliver a multiplier similar to the one associated with capital accumulation in a neoclassical growth model. Because the intermediate goods share of revenue is about 1/2, this multiplier is substantial. Second, just as a chain is only as strong as its weakest link, problems at any point in a production chain can reduce output substantially if inputs enter production in a complementary fashion. This paper builds a model to quantify these forces and shows that it can easily generate 50-fold aggregate income differences.
What explains the enormous differences in incomes across countries? This paper returns to two old ideas: linkages and complementarity. First, linkages between firms through intermediate goods deliver a multiplier similar to the one associated with capital in a neoclassical growth model. Because the intermediate goods share of output is about one-half, this multiplier is substantial. Second, just as a chain is only as strong as its weakest link, problems along a production chain can sharply reduce output under complementarity. These forces considerably amplify distortions to the allocation of resources, bringing us closer to understanding large income differences across countries.(JEL: D57, E23, O1O, O47)
I. Introduction, 65. — II. A model of long-run growth, 66. — III. Possible growth patterns, 68. — IV. Examples, 73. — V. Behavior
of interest and wage rates, 78. — VI. Extensions, 85. — VII. Qualifications, 91.
Before the global financial crisis of 2008, African economies were experiencing an unprecedented economic boom. While the unweighted GDP per capita growth was -0.2 percent in 1980-95, it jumped to 2.26 percent in 1996-05, and accelerated to 2.90 percent in 2006-07. Evidence suggests that the growth push observed after 1995 was driven by a combination of better policies 2 and the commodity boom. 3 Between early 2003 and mid-2008, oil prices climbed by 320 percent in dollar terms, and internationally traded food prices by 138 percent. But the boom is over (see table below). Prices across the board have fallen, giving up much of their earlier gains due to slower global GDP growth, increased supplies, and revised expectations. This sudden change marks the end of what has been the biggest commodity price boom of the past decades. With the commodity boom, investors were attracted to the region to take advantage of Africa's huge commodity potential. Between 2000 and 2006 foreign direct investments to the region almost tripled, and the bulk of these investments went to resource-rich countries. 4 As a consequence commodity production reached record highs, notably in oil and mineral sectors. Investments in new oil fields, copper, nickel, coal, gas, cobalt, uranium and other minerals are underway, and production capacity is expected to increase significantly in the near future – at a time when prices are depressed. In short, Africa is experiencing a dual commodity shock – a supply and a demand shock. And the commodity exporting sector is the main channel through which the global financial and economic crisis is hitting the region.
In an 80-country panel since the 1960s, the convergence rate for per capita GDP is around 1.7% per year. This “beta convergence” is conditional on an array of explanatory variables that hold constant countries’ long-run characteristics. The introduction of country fixed effects generates a much higher—and, I argue, misleading—convergence rate. In a much longer time frame—28 countries since 1870—estimation with country fixed effects is more appropriate, and the estimated convergence rate is around 2.4% per year. Combining the point estimates from the post-1960s and post-1870 panels suggests that the conditional convergence rate is between 1.7% and 2.4% per year, an interval that contains the “iron-law” rate of 2%. In the post-1960s panel, estimation without country fixed effects supports the modernization hypothesis, in the form of positive effects of per capita GDP and schooling on democracy and maintenance of law and order. The long-term panel with country fixed effects also supports modernization, in the sense of a positive effect of per capita GDP on the Polity indicator for democracy. A measure of dispersion—the standard deviation of the log of per capita GDP across 25 countries—is reasonably stable since 1870. This lack of “sigma convergence” is consistent with the presence of beta convergence. For 34 countries—including China and India—observed since 1896, the dispersion of per capita GDP declines since the late 1970s, especially when the country data are weighted by population. This sigma convergence reflects particularly the incorporation of China and India into the world market economy. For 29 countries since 1919, the levels and trends in cross-country dispersion are similar for consumption and GDP.
This chapter focuses on what has traditionally been considered as the “core” infrastructure sectors, which enhance the productivity of physical capital and land (mainly transportation and power). It discusses human infrastructure- or those services that raise the productivity of labor (health, education, nutrition). Public investment will be defined broadly to include all government spending in these sectors, rather than just capital expenditures as traditionally defined in official statistics. This is to ensure that the economic issues regarding recurrent as well as capital spending are covered in the chapter. The chapter emphasizes on recent policy debates without presenting the basic theoretical concepts underlying them in detail. The chapter on stresses common cross-sectoral themes regarding the pricing of and investment in infrastructure services in developing countries, rather than detailed issues within sectors.
Many social scientists believe that dumping long lists of explanatory variables into linear regression, probit, logit, and other statistical equations will successfully “control” for the effects of auxiliary factors. Encouraged by convenient software and ever more powerful computing, researchers also believe that this conventional approach gives the true explanatory variables the best chance to emerge. The present paper argues that these beliefs are false, and that without intensive data analysis, linear regression models are likely to be inaccurate. Instead, a quite different and less mechanical research methodology is needed, one that integrates contemporary powerful statistical methods with deep substantive knowledge and classic data—analytic techniques of creative engagement with the data.
The paper employs a heuristic comparative approach suggested by Ismail (2009) to search for evidence of Dutch disease in oil-rich countries of the Central African Economic and Monetary Community (CEMAC). While these countries have benefitted from high international oil prices in recent years, they have also experienced relatively large real exchange rate appreciations, raising concerns regarding the presence of Dutch disease and casting doubts on their ability to achieve high growth and employment in the long run. To isolate from any dynamics related to the exchange rate regime, we focus on the 14 member countries that constitute the CFA franc zone. We separate them into net oil importers and net oil exporters and look at economic growth, the real exchange rate, and the agricultural and external sectors. Based on traditional models, our findings are broadly consistent with the presence of Dutch disease in the second group during the oil-price boom. Departing from these models yields mixed results, suggesting the need to employ a case-by-case approach.
Purpose
The purpose of this paper is to survey the empirical literature on the causal relationship between energy consumption and economic growth.
Design/methodology/approach
The four major hypotheses (growth, conservation, neutrality, and feedback) are briefly outlined with respect to the energy consumption‐growth nexus and corresponding policy implications of each. The survey focuses on country coverage, variables selected and model specification, econometric approaches, various methodological issues, and empirical results.
Findings
Though there is no clear consensus on the results for a specific country or groups of countries, directions for future research are discussed.
Research limitations/implications
The research surveyed may be dated by the time of publication given the ongoing research in this area.
Originality/value
This paper serves as a reference for researchers on the causal relationship between energy consumption and economic growth.
Does economic development depend on geographic endowments like temperate instead of tropical location, the ecological conditions shaping diseases, or an environment good for grains or certain cash crops? Or do these endowments of tropics, germs, and crops affect economic development only through institutions or policies? We test the endowment, institution, and policy views against each other using cross country evidence. We find evidence that tropics, germs, and crops affect development through institutions. We find no evidence that tropics, germs, and crops affect country incomes directly other than through institutions, nor do we find any effect of policies on development once we control for institutions.
This paper considers the relationship between aggregate productivity and stock and flow government-spending variables. The empirical results indicate that (i) the nonmilitary public capital stock is dramatically more important in determining productivity than is either the flow of nonmilitary or military spending, (ii) military capital bears little relation to productivity, and (iii) a ‘core’ infrastructure of streets, highways, airports, mass transit, sewers, water systems, etc. has most explanatory power for productivity. The paper also suggests an important role for the net public capital stock in the ‘productivity slowdown’ of the last fifteen years.
There is currently much debate about the effectiveness of foreign aid and about what kind of projects can engender economic development. There is skepticism about the ability of econometric analysis to resolve these issues or of development agencies to learn from their own experience. In response, there is increasing use in development economics of randomized controlled trials (RCTs) to accumulate credible knowledge of what works, without overreliance on questionable theory or statistical methods. When RCTs are not possible, the proponents of these methods advocate quasi-randomization through instrumental variable (IV) techniques or natural experiments. I argue that many of these applications are unlikely to recover quantities that are useful for policy or understanding: two key issues are the misunderstanding of exogeneity and the handling of heterogeneity. I illustrate from the literature on aid and growth. Actual randomization faces similar problems as does quasi-randomization, notwithstanding rhetoric to the contrary. I argue that experiments have no special ability to produce more credible knowledge than other methods, and that actual experiments are frequently subject to practical problems that undermine any claims to statistical or epistemic superiority. I illustrate using prominent experiments in development and elsewhere. As with IV methods, RCT-based evaluation of projects, without guidance from an understanding of underlying mechanisms, is unlikely to lead to scientific progress in the understanding of economic development. I welcome recent trends in development experimentation away from the evaluation of projects and toward the evaluation of theoretical mechanisms. (JEL C21, F35, O19)
Has Africa finally reached the path to sustained growth? We find that much of the improvement in economic performance in Africa after 1995 is attributable to a substantial reduction in the frequency and severity of growth declines in all economies and an increase in growth accelerations in mineral-rich economies. We find, however, that growth accelerations have not been generally accompanied by improvements in variables often correlated with long run growth, such as investment. We also fail to find evidence that substantial policy and governance improvements were associated with the post-1995 accelerations. We conclude that Africa's growth recovery remains fragile. © The author 2009. Published by Oxford University Press on behalf of the Centre for the Study of African Economies. All rights reserved. For permissions, please email: [email protected]
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This paper provides a survey of the recent progress in the literature of energy consumption-economic growth and electricity consumption-economic growth causality nexus. The survey highlights that most empirical studies focus on either testing the role of energy (electricity) in stimulating economic growth or examining the direction of causality between these two variables. Although the positive role of energy on growth has become a stylized fact, there are some methodological reservations about the results from these empirical studies. A general observation from these studies is that the literature produced conflicting results and there is no consensus neither on the existence nor on the direction of causality between energy consumption (electricity consumption) and economic growth. As a policy implication, to avoid from conflicting and unreliable results, the authors may use the autoregressive distributed lags bounds test, two-regime threshold co-integration models, panel data approach and multivariate models including new variables (such as: real gross fixed capital formation, labor force, carbon dioxide emissions, population, exchange rates, interest rates, etc.). Thus, the authors should focus more on the new approaches and perspectives rather than by employing usual methods based on a set of common variables for different countries and different intervals of time.
Almost by definition, the basis for development is infrastructure - whether services for human infrastructure (health, education, nutrition) or physical infrastructure (transport, energy, water). Although the infrastructure sectors are diverse, what they have in common is that public policy has had a great deal to do with how these services are provided and financed in almost all countries. The author reviews the recent literature on two key aspects of that involvement: investment and pricing. While the quality of the econometric evidence varies, recent literature reinforces the view that human and physical infrastructure are critical for economic growth and the reduction of poverty. And the state is recognized as playing a key role in ensuring the efficient, equitable allocation of resources for infrastructure. Despite many sound theoretical reasons for such public involvement, however, recent studies have shown that it leaves much to be desired in efficiency and equity. One symptom is underinvestment in key subsectors that have high economic returns and that help the poor the most, such as primary education and rural health clinics, in relation to more expensive interventions, such as tertiary education and urban hospitals. Another common malaise is the poor use of scarce resources, leading to low quality (students learning little) and reliability (irregular power and water flows), poor maintenance (dilapilated roads), and inappropriate input use (too many school adminstrators or health workers and not enough books or drugs in producing education health outcomes). Just as market failures necessitate government intervention in the infrastructure sectors, so government failures should be considered in deciding the depth and extent of that intervention. The literature has made some advances in diagnosing these problems in poor countries and proposing solutions. But information gaps remain, particularly in developing robust methodologies for: 1) making intersectoral comparisons across the wide range of infrastructure services; 2) crafting more diverse policies about the public-private balance in infrastructure investment, depending on the nature of"public goods"characteristics for various types of infrastructure services, or even across activities for the same service (for example, power transmission versus distribution); and 3) taking issues of political economy into account, such as the vested interests of those with large financial interests in infrastructure. The author also highlights public pricing as a policy initiative that has recently gotten much attention.After briefly reviewing the basic concepts of pricing, he focuses on the literature about pricing reform. Most commonly, the public sector is the main provider of infrastructure services, usually free or at subsidized prices. But the recent literature has aired a rethinking of the balance between public and private financing of infrastructure. The debate in this area is often heated. Health and education are traditionally provided free and some recent literature argues for positive prices, at least for higher tiers of service. The principle of public pricing has been more widely accepted in transport, energy, and to a lesser extent water, but often the levels are too low and do not provide the appropriate incentives for efficient and equitable use.
Per capita income in the richest countries of the world exceeds that in the poorest countries by more than a factor of 50. What explains these enormous differences? This paper returns to several old ideas in development economics and proposes that linkages, complementarity, and superstar effects are at the heart of the explanation. First, linkages between firms through intermediate goods deliver a multiplier similar to the one associated with capital accumulation in a neoclassical growth model. Because the intermediate goods' share of revenue is about 1/2, this multiplier is substantial. Second, just as a chain is only as strong as its weakest link, problems at any point in a production chain can reduce output substantially if inputs enter production in a complementary fashion. Finally, the high elasticity of substitution associated with final consumption delivers a superstar effect: GDP depends disproportionately on the highest levels of productivity in the economy. This paper builds a model with links across sectors, complementary inputs, and highly substitutable consumption, and shows that it can easily generate 50-fold aggregate income differences.
Measured rates of growth in real per capita income differ drastically depending on the data source. This phenomenon occurs largely because data sets differ in whether and how they adjust for changes in relative prices across countries. Replication of several recent studies of growth determinants shows that results are sensitive in important ways to the choice of data. Previous warnings against using data adjusted to increase cross-country comparability to study within-country patterns over time (growth rates) have been largely ignored at the cost of possibly contaminating the conclusions.
The prevalence of high lightning activity in Swaziland negatively affects the quality and reliability of power supply to the SEB Customers. More than 50% of power outages on transmission overhead lines are attributed to lightning. Owing to the good operating characteristics of metal oxide varistors lightning related power outages have been effectively optimized in many parts of the world utilizing zinc oxide transmission line surge arresters. A pilot project was undertaken to install transmission zinc oxide (ZnO) surge arresters in one of the most affected 66 kV lines in the country. Implementation took place in August 2003 (Spring) at the beginning of the lightning season. This paper presents an out line of how the project was conducted and its outcome
This article assesses the potential effects on least developed country (ldc) exports of duty-free access to the Quad markets on tariff peak items
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Underpowered: the state of the power sector in Sub-Saharan Africa
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