The impacts of the urban-rural electricity gap and natural resources rents on human development in developing countries

Abstract

This study seeks to evaluate the effect of the Urban-Rural Electricity Gap (UREG) and Natural Resources Rents (NRR) on the Human Development Index (HDI) in 117 developing countries within the duration 2013–2022 using the S-GMM method. The findings indicate that UREG and NRR exert a detrimental effect on HDI, increasing inequalities in authorization to education, medical services, and economic opportunities in countryside, especially in nations with low HDI. Conversely, resources can raise the human development index when they are properly and properly managed, infrastructure investment is concentrated, and human development is prioritized. The “resource curse” impact, which has negative effects including corruption, imbalances in economic development, and damage to the environment, is another drawback and risk associated with an excessive subordination to natural resources, as this research demonstrates. Key measuring variables included in the study include HDI, total natural resource return (as a percentage of GDP), and the rate of power availability between urban and rural areas. Control drivers for instance economic growth, trade openness, foreign direct investment, the proportion of value added of the tertiary industry to the total GDP, industrialization, and population are also included. Therefore, the study has demonstrate that the coordination between sustainable resource management and investment in energy infrastructure is a core factor to promote comprehensive human development. In addition, our not only expands the theories of sustainable development, the resource curse, and endogenous development, but also provides important empirical evidence to support the development of balanced and sustainable policies in developing countries