The wall between urban and rural: How does the urban-rural electricity gap inhibit the human development index

Abstract

Based on the Instrumental Variables - Generalized Method of Moments (IV-GMM) model, this paper explores the relationship, heterogeneity, and mechanisms between the urban-rural electricity gap and the human development index for 176 countries during 2000–2020. The key findings are as follows: (1) Urban-rural electricity gap is harmful to the improvement of the human development index; an enlarged gap in electricity accessibility between urban and rural is detrimental to sustainable human development. (2) Urban-rural electricity gap is more harmful to the increase of human development index in low-income countries and low governance efficiency countries. Also, the heterogeneity exists in different quantiles, and their nexus is closer in countries with lower levels of human development index. (3) Income inequality and energy poverty act as mechanisms, which means that the urban-rural electricity gap inhibits the human development index by exacerbating income inequality and energy poverty.