Reducing energy poverty in developing countries: does democracy matter?

Abstract

This study examines the effect of democracy on reducing energy poverty in developing countries, where access to clean, modern, reliable, and affordable energy remains insufficient. Drawing on neo-institutional theory, the study analyzes how political institutions influence the provision and distribution of energy services. Unlike existing studies, this study adopts a multidimensional approach to democracy by employing five indices (electoral, participatory, liberal, deliberative, and egalitarian) as well as aggregate and disaggregated indicators of energy poverty. Using panel data from 48 developing countries over the period 2006–2023, the two-stage least squares (2SLS) method was applied. The results show that democracy contributes significantly to reducing energy poverty, notably by improving access to clean fuels and increasing electricity consumption, but with differentiated effects depending on institutional dimensions. This effect is more pronounced in low-income countries. The study thus highlights the importance of strengthening democratic institutions and governance to promote inclusive energy policies and support sustainable development.