Natural resource wealth in sub-Saharan Africa: A boon for public investment in renewable energy?

Titolo Rivista ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT
Autori/Curatori Souleymane Diallo
Anno di pubblicazione 2023 Fascicolo 2023/2
Lingua Inglese Numero pagine 22 P. 19-40 Dimensione file 223 KB
DOI 10.3280/EFE2023-002002
Il DOI è il codice a barre della proprietà intellettuale: per saperne di più clicca qui

Qui sotto puoi vedere in anteprima la prima pagina di questo articolo.

Se questo articolo ti interessa, lo puoi acquistare (e scaricare in formato pdf) seguendo le facili indicazioni per acquistare il download credit. Acquista Download Credits per scaricare questo Articolo in formato PDF

Anteprima articolo

FrancoAngeli è membro della Publishers International Linking Association, Inc (PILA)associazione indipendente e non profit per facilitare (attraverso i servizi tecnologici implementati da CrossRef.org) l’accesso degli studiosi ai contenuti digitali nelle pubblicazioni professionali e scientifiche

This paper examines the role of natural resource wealth in financing public investment in renewable energy in 25 sub-Saharan African countries over the period 1996 to 2019. Results from two step system Generalized Method of Moments (GMM) estimates reveal that natural resource wealth negatively affects public investment in renewable energy. A distinction between the types of natural resources allowed to establish that this negative effect comes exclusively from the rents of point natural resources. Furthermore, the results show that institutional quality and human capital favor public investment in renewable energy. These results are robust when using the Driscoll-Kraay estimator. In terms of policy implications, it is imperative to promote good governance of natural resource rents, especially those from point source resources. It will also be necessary to redirect these rents towards the financing of structuring projects such as renewable energies in order to promote sustainable development.

Keywords:Natural resource wealth, public renewable energy investment, GMM, Sub-Saharan Africa

Jel codes:Q42, Q32, Q28

  1. Ackah, I., Kizys, R. (2015). Green growth in oil producing African countries: A panel data analysis of renewable energy demand. Renewable and Sustainable Energy Reviews, 50, 1157-1166.
  2. AfDB (African Development Bank). (2017). The new deal on energy for Africa. A transformative partnership.
  3. Aguirre, M., Ibikunle, G. (2014). Determinants of RE growth: A global sample analysis. Energy Policy, 69, 374-384.
  4. Ahmadov, A. K., van der Borg, C. (2019). Do natural resources impede renewable energy production in the EU? A mixed-methods analysis. Energy Policy, 126, 361-369.
  5. Arellano, M., Bond, S. (1991). Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. The Review of Economic Studies, 58(2), 277-297. DOI: 10.2307/2297968
  6. Arellano, M., Bover, O. (1995). Another look at the instrumental variable estimation of error-components models. Journal of Econometrics, 68(1), 29-51. DOI: 10.1016/0304-4076(94)01642-D
  7. Arezki, R., Gylfason, T. (2013). Resource rents, democracy, corruption and conflict: Evidence from sub-Saharan Africa. Journal of African Economies, 22(4), 552-569.
  8. Auty, R. M. (2001). The political economy of resource-driven growth. European Economic Review, 45(4/6), 839-846. DOI: 10.1016/S0014-2921(01)00126-X
  9. Barro, R. J., Lee, J. W. (2013). A new data set of educational attainment in the world, 1950-2010. Journal of Development Economics, 104, 184-198.
  10. Berg, A., Portillo, R., Yang, S. C., Zanna, L. F. (2013). Public investment in resource-abundant developing countries. IMF Economic Review, 61(1), 92-129.
  11. Bhattacharyya, S., Collier, P. (2013). Public Capital in Resource Rich Economies: Is There a Curse? Oxford Economic Papers, 66, 1-24.
  12. Bhattacharyya, S., Hodler, R. (2010). Natural resources, democracy and corruption. European Economic Review, 54(4), 608-621.
  13. Biresselioglu, M. E., Kilinc, D., Onater-Isberk, E., Yelkenci, T. (2016). Estimating the political, economic and environmental factors’ impact on the installed wind capacity development: A system GMM approach. Renewable Energy, 96, 636-644.
  14. Blanco, L., Grier, R. (2012). Natural resource dependence and the accumulation of physical and human capital in Latin America. Resources Policy, 37(3), 281-295.
  15. Blundell, R., Bond, S. (1998). Initial conditions and moment restrictions in dynamic panel data models. Journal of Econometrics, 87(1), 115-143. DOI: 10.1016/S0304-4076(98)00009-8
  16. Blundell, R., Bond, S. (2000). GMM estimation with persistent panel data: an application to production functions. Econometric Reviews, 19(3), 321-340.
  17. Bourcet, C. (2020). Empirical determinants of renewable energy deployment: A systematic literature review. Energy Economics, 85(104563).
  18. Brunnschweiler, C. (2010). Finance for renewable energy: an empirical analysis of developing and transition economies. Environment and Development Economics, 15(3), 241-274.
  19. Brunnschweiler, C. N. (2008). Cursing the blessings? Natural resource abundance, institutions, and economic growth. World Development, 36(3), 399-419.
  20. Cadoret, I., Padovano, F. (2016). The political drivers of renewable energies policies. Energy Economics, 56, 261-269.
  21. Cockx, L., Francken, N. (2014). Extending the concept of the resource curse: Natural resources and public spending on health. Ecological Economics, 108, 136-149.
  22. Cockx, L., Francken, N. (2016). Natural resources: a curse on education spending? Energy Policy, 92, 394-408.
  23. Da Silva, P. P., Cerqueira, P. A., Ogbe, W. (2018). Determinants of renewable energy growth in Sub-Saharan Africa: evidence from panel ARDL. Energy, 156, 45-54.
  24. Desha, C., Robinson, D., Sproul, A. (2015). Working in partnership to develop engineering capability in energy efficiency. Journal of Cleaner Production, 106, 283-291.
  25. Dollar, D., Kraay, A. (2004). Trade, growth, and poverty. The Economic Journal, 114(493), 22-49.
  26. Driscoll, J. C., Kraay, A. C. (1998). Consistent covariance matrix estimation with spatially dependent panel data. Review of Economics and Statistics, 80(4), 549-560.
  27. Fallon, P. R., and Layard, P. R. (1975). Capital-skill complementarity, income distribution, and output accounting. Journal of Political Economy, 83(2), 279-302.
  28. Feenstra, R. C., Inklaar, R., Timmer, M. P. (2015). The next generation of the Penn World Table. American Economic Review, 105(10), 3150-3182.
  29. Figge, F. (2005). Capital substitutability and weak sustainability revisited: the conditions for capital substitution in the presence of risk. Environmental Values, 14(2), 185-201.
  30. Hafner, M., Tagliapietra, S., De Strasser, L. (2018). Energy in Africa: Challenges and opportunities. Springer Nature, p. 112.
  31. Hansen, L. P. (1982). Large sample properties of generalized method of moments estimators. Econometrica: Journal of the Econometric Society, 1029-1054. DOI: 10.2307/1912775
  32. Hartwick, J. (1977). Intergenerational equity and the investing of rents from exhaustible resources. The American Economic Review, 67(5), 927-974.
  33. Hsiao, C. (2014). Analysis of panel data. Cambridge: Cambridge University Press.
  34. IRENA (International Renewable Energy Agency) (2021). Renewable Energy Policies and Measures Database.
  35. Isham, J., Woolcock, M., Pritchett, L., Busby, G. (2005). The varieties of resource experience: natural resource export structures and the political economy of economic growth. The World Bank Economic Review, 19(2), 141-174.
  36. Karimu, A., Adu, G., Marbuah, G., Mensah, J. T., Amuakwa‐Mensah, F. (2017). Natural resource revenues and public investment in resource‐rich economies in Sub‐Saharan Africa. Review of Development Economics, 21(4), 107-130. DOI: 10.35188/UNU-WIDER/2016/067-6
  37. Kim, J., Heo, E. (2013). Asymmetric substitutability between energy and capital: Evidence from the manufacturing sectors in 10 OECD countries. Energy Economics, 40, 81-89.
  38. Koengkan, M. F. (2019). Effects of financial openness on renewable energy investments expansion in Latin American countries. Journal of Sustainable Finance and Investment, 10(1), 65-82. DOI: 10.1080/20430795.2019.1665379
  39. Martin, G. (1996). Renewable Energy and the ODA. Renewable Energy, 9(1/4), 1098-1103. DOI: 10.1016/0960-1481(96)88470-9
  40. Mavrotas, G., Murshed, S. M., Torres, S. (2011). Natural resource dependence and economic performance in the 1970-2000 period. Review of Development Economics, 15(1), 124-138.
  41. Mehrara, M., Rezaei, S., Razi, D. H. (2015). Determinants of renewable energy consumption among ECO countries; based on Bayesian model averaging and weighted-average least square. International Letters of Social and Humanistic Sciences, 54, 96-109.
  42. Nickell, S. (1981). Biases in dynamic models with fixed effects. Econometrica: Journal of the Econometric Society, 1417-1426. DOI: 10.2307/1911408
  43. Nicolini, M., Tavoni, M. (2017). Are renewable energy subsidies effective? Evidence from Europe. Renewable and Sustainable Energy Reviews, 74, 412-423.
  44. Omri, A., Nguyen, D. K. (2014). On the determinants of renewable energy consumption: International evidence. Energy, 72, 554-560.
  45. Ouoba, Y. (2016). Natural resources: Funds and economic performance of resource-rich countries. Resources Policy, 50, 108-116.
  46. Ouoba, Y. (2020). Natural resources fund types and capital accumulation: A comparative analysis. Resources Policy, 66, 101635.
  47. Pfeiffer, B., Mulder, P. (2013). Explaining the diffusion of renewable energy technology in developing countries. Energy Economics, 40, 285-296.
  48. Polzin, F., Migendt, M., Täube, F. A., von Flotow, P. (2015). Public policy influence on renewable energy investments – A panel data study across OECD countries. Energy Policy, 80, 98-111.
  49. Robinson, J. A., Torvik, R. (2005). White elephants. Journal of Public Economics, 89(2/3), 197-210.
  50. Roodman, D. (2009a). How to do xtabond2: An introduction to difference and system GMM in Stata. The Stata Journal, 9(1), 86-136.
  51. Roodman, D. (2009b). A note on the theme of too many instruments. Oxford Bulletin of Economics and Statistics, 71(1), 135-158.
  52. Ross, M. L. (2008). Oil, Islam, and women. American Political Science Review, 102(1), 107-123.
  53. Solow, R. M. (1974). Intergenerational equity and exhaustible resources. The Review of Economic Studies, 41, 29-45. DOI: 10.2307/229637
  54. Stevens, P., Dietsche, E. (2008). Resource curse: An analysis of causes, experiences and possible ways forward. Energy Policy, 36(1), 56-65.
  55. Sun, H. P., Sun, W. F., Geng, Y., Yang, X., Edziah, B. K. (2018). How does natural resource dependence affect public education spending? Environmental Science and Pollution Research, 26, 3666-3674.
  56. Tsani, S. (2013). Natural resources, governance and institutional quality: The role of resource funds. Resources Policy, 38(2), 181-195.
  57. Turan, T., Yanıkkaya, H. (2020). Natural resource rents and capital accumulation nexus: do resource rents raise public human and physical capital expenditures? Environmental Economics and Policy Studies, 22(3), 449-466.
  58. U.S.EIA (United State Energy Information Administration) (2021). International Energy Dataset.
  59. Uzar, U. (2020). Political economy of renewable energy: does institutional quality make a difference in renewable energy consumption? Renewable Energy, 155, 591-603.
  60. Van der Ploeg, F., Venables, A. J. (2011). Harnessing windfall revenues: optimal policies for resource‐rich developing economies. The Economic Journal, 121(551), 1-30.
  61. World Bank (2021a). World Developement Indicators.
  62. World Bank (2021b). World Governance Indicators.
  63. Wu, L., Broadstock, D. C. (2015). Does economic, financial and institutional development matter for renewable energy consumption? Evidence from emerging economies. International Journal of Economic Policy in Emerging Economies, 8(1), 20-39.

Souleymane Diallo, Natural resource wealth in sub-Saharan Africa: A boon for public investment in renewable energy? in "ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT" 2/2023, pp 19-40, DOI: 10.3280/EFE2023-002002