Addressing rural energy poverty and rural-urban energy access gap in developing countries: does international remittances matter?

Abstract

Alleviating rural energy poverty and inequality in rural-urban energy accessibility is a panacea for rural economic development. Researchers and policymakers have underscored the importance of remittances in socio-economic development; however, the role of remittances on rural energy poverty and disparity in rural-urban energy access remains under-researched area. This study, therefore, investigates whether remittances contribute to enhance rural energy poverty and rural-urban inequality in energy access in 135 developing countries from 2000–2020. Evidence from cross-sectional and endogeneity-corrected results supports that international remittance inflow substantially reduces rural poverty and rural-urban inequality in energy access. The results also indicate that the effect of remittance on rural energy poverty and rural-urban inequality in energy access depends on the state of countries’ financial development and GDP per capita, indicating that remittances alleviate rural energy poverty and inequality in rural-urban energy accessibility in countries with higher access to credit and per capita GDP. We documented that these findings differ across income groups. The policy implications are discussed.