Oil dependency, political institutions, and urban–rural disparities in access to electricity in Africa

Abstract

AbstractIn line with the resource curse literature, this paper examines the effect of oil dependency on the disparities in access to electricity between urban and rural areas in Africa, conditional on the quality of political institutions. Based on data from 36 African countries over the period 2000–2017, our investigation suggests that oil rents (% of GDP) increase urban–rural disparities in access to electricity. However, the quality of institutions shapes the effect of oil dependency on these disparities. Specifically, a 10% increase in the institutional quality score reduces the adverse effects of oil rent on electricity access disparity by around 19%, and the negative impact of oil dependency on urban–rural disparities is reversed when institutional quality reaches a score of 52% on a scale from 0 to 100. The robustness tests support these results and call for strengthening the quality of institutions to overcome the resource curse in Africa.