Energy poverty, government expenditure, and institution factors in Sub-Saharan Africa countries: evidence based on a panel threshold model

Abstract

This article investigates the relationship between energy poverty and public expenditure for a sample of 20 Sub-Saharan countries over the period 2006–2020. This paper focuses on three research objectives. First is using a panel data threshold model with fixed effects proposed by Hansen (J Econom 93(2):345-368, 1999) to detect the presence of the nonlinear effect of public expenditure on energy poverty. Second, we try to explain the effect of public expenditure transmission channels on energy poverty. Third, we explore the impact of public expenditure on energy poverty considering the role of institution factors. Thus, our analysis approves the existence of a link between energy poverty and public expenditure with a threshold of about 17.65% of GDP. In addition, CO2 emissions can accelerate the growth of energy poverty in SSA countries. Indeed, the results show that in countries with high energy poverty, there is a bidirectional causal link between CO2 emissions and energy poverty. This would provide a better understanding of the relationship between public expenditure and energy poverty suggesting useful implications for policymakers in targeting sustainable energy.