Full circle: electricity, development and welfare

摘要

Electricity is presumed to be an essential contributor to economic growth in emerging economies. Whereas earlier research efforts employ traditional measures of growth, namely GDP per capita, to map the impact of electricity, this study chooses to measure the impact of aggregate electricity provision on all-round socioeconomic development as measured by the Human Development Index (HDI). Granger causality tests are run to establish the relationship between electricity and development for a sample of 21 countries chosen on the basis of average annual HDI scores of 4.00 and above cumulated over the periods 1981-1990, 1990-2000 and 2000-2012. For four countries, namely China, Egypt, Morocco and Nepal, unidirectional causality running from electricity consumption to human development was observed, while for Algeria, Egypt, Myanmar, Sudan and Yemen, the reverse was observed. It was found that reducing aggregate technical and commercial losses could improve development outcomes in varying degrees.