Dynamics of PPP investment in energy and country governance: evidence from Sub-Saharan Africa

Abstract

PurposeThis paper intends to investigate the empirical link between governance and energy investment in PPP. To succinctly account for biases in the fixed effects (FE) model, the authors adopted different bias-corrected techniques. The majority of these techniques provided evidence that PPP investments in energy are boosted by increasing the desire for accountability, prioritising the voice of the masses and disabusing the rule of laws. This study could not find any positive influence from the control of corruption to PPP investment in energy.Design/methodology/approachThe acute shortage of power supply in SSA has attracted PPP investments in the energy subsector of the economy, leading to the recent debate on governance and public, private investment. The authors contributed to this argument by examining the impact of country governance on PPP investment in energy using a sample of countries in SSA.FindingsTherefore, the authors concluded that low control of corruption is responsible for the inadequate volume of PPP investments. In the light of this, the government should redefine the anti-corruption bill of their sovereignty to accommodate severe sanctions when necessary.Originality/valueThis paper uses the fixed effects (FE) model by introducing batteries of nonlinear panel models to capture the relationship between the impacts of country governance on PPP investment in energy.