Different institutions matter for urban and rural electrification in Sub-Saharan Africa

Abstract

We use spatial data on electricity access for 178,681 households in 28 countries in Sub-Saharan Africa to investigate the relationship between institutions and electrification. We find that for urban electrification, the quality of state institutions are the main institutional factors associated with electrification. However, in rural areas, state institutions are insignificant, whereas the degree of political fragmentation associated with long lasting local-level institutions that predate the colonial period is highly significant. Our results are of policy relevance and suggest that for rural electrification initiatives, stakeholders should consider focusing on deploying decentralized generation solutions in areas that have fragmented local-level institutions. This is so as such areas are more likely to suffer from higher coordination costs and have difficulty in internalizing geographic spillovers.