Electrification and Economic Development: A Microeconomic Perspective

Abstract

In this Energy for Economic Growth (EEG) state-of-knowledge paper, the authors review literature on the microeconomics of electrification in developing countries and organize existing and future work around 3 questions: how should governments and firms expand the supply of electricity? for newly connected households, firms, and public facilities, what are the drivers of consumption growth? what are the impacts of electrification and how can they be maximized, for example, through the design of the electrification program or the provision of complementary inputs? The authors highlight 3 general priorities and 5 key areas for future empirical research. This research was supported by the UK Department for International Development’s Energy and Economic Growth Applied Research Programme