The role of corruption control and regulatory quality in energy efficiency transition tendencies in Africa.

Abstract

This study answers an important policy question related to energy efficiency transition tendencies and the role that control of corruption and regulatory quality can play, using the Stochastic Frontier and Panel Markov-Switching techniques with panel data from 46 African countries. We have demonstrated in this study that African countries have been locked in a low energy-efficient state, with tendencies to transition out considered low to moderate with a 21-24% chance and more likely in the long term (i.e., after a decade). This raises serious concerns about the robust nature of current energy efficiency policies implemented and the kind of investment in technology undertaken in Africa. The results further illustrate that improving regulatory quality and controlling corruption can increase African countries' likelihood to leapfrog out of the low energy-efficient state. Thus, the findings underscore the importance of developing better and proper institutions to achieve the UN SDG target 7.3.