Do Political Systems and Ideologies Neutralise Private Sector Contributions to Renewable Energy in Developing Economies?

Obumneke Muoneke, The University Of Adelaide, Australia
Yan Tan, the University of Adelaide
Guy Robinson, University of Adelaide

Accomplishing renewable energy development in emerging and frontier economies across Asia, Africa and South America is complicated by differing political systems, party ideologies, institutional quality, and economic development. The inequality in growth levels and public finance constraints across six selected emerging and frontier economies raises doubts about the ability of prosperity-lagging countries (Indonesia and Vietnam) to develop renewable energy without the emergence of a supporting actor (the private sector), in line with the dictates of ecological modernisation theory. Unbundling the political architecture present in these economies allows extensive investigation of how the sub-types and party ideologies of prevailing political systems determine private sector participation in renewable energy development at the country level. Using time series data extracted from the World Development Indicators, Political Risk Services Group, and Varieties of Democracy Project, and the augmented mean group econometric technique for model estimation, with respect to the selected economies, this study analyses and quantifies: i) how institutional quality measures (level of bureaucratic quality and corruption) under different political system sub-types influence private sector participation in renewable energy development, and ii) how ideologies of political parties influence private sector participation in renewable energy development.

Keywords: Econometrics , Population, Environment, and Climate Change

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