Sustainable Energy Supplies in Developing Countries: Does National Governance Matter?

In this paper, we examine the impact of national governance quality on clean energy supplies in developing countries. We used a large sample of 103 developing countries over 21 years. We employ pooled ordinary least squares as the primary estimator. Additionally, we apply a Fixed Effect and the Two-Step System-Generalized Method of Moments to mitigate contemporaneity bias. Following prior studies, we construct national governance quality from the six World Governance Indicators. Consistent with our expectations, we find a positive and significant association between national governance quality and clean energy supplies. The results show that countries with high national governance quality are more likely to generate high amounts of clean energy than low-governed countries and to experience a high green economy. The results are also significant when the governance indicator is disaggregated into individual components. However, in a continental analysis, we found that the link between national governance quality and clean energy supplies is stronger in Africa than on other continents. Our results are robust to alternative measurements and econometric identification strategies.