Does Household Electrification Supercharge Economic Development?

Future initiatives may work better if paired with complementary inputs that allow people to do more with power

From:: Foreign, Commonwealth & Development Office
Published: 31 December 2020

Document Type:: Journal Article
Theme:: Economic Growth, Infrastructure
Authors:: Lee, K., Miguel, E, Wolfram, C

Abstract

In recent years, electrification has reemerged as a key priority in low-income countries, with a particular focus on electrifying households. Yet the microeconomic literature examining the impacts of electrifying households on economic development has produced a set of conflicting results. Does household electrification lead to measurable gains in living standards or not? Focusing on grid electrification, we discuss how the divergent conclusions across the literature can be explained by differences in methods, interventions, potential for spillovers, and populations. The article concludes that access to household electrification alone is not enough to drive meaningful gains in development outcomes. Instead, future initiatives may work better if paired with complementary inputs that allow people to do more with power.

This research is part of the Energy and Economic Growth Applied Research Programme

Citation

Lee, Kenneth, Edward Miguel, and Catherine Wolfram. 2020. ”Does Household Electrification Supercharge Economic Development?” Journal of Economic Perspectives, 34 (1): 122-44.