Electrification and Economic Development: A Microeconomic Perspective

In this Energy for Economic Growth (EEG) state-of-knowledge paper, we review literature on the microeconomics of electrification in developing countries and organize existing and future work around three questions: First, how should governments and firms expand the supply of electricity? Second, for newly connected households, firms, and public facilities, what are the drivers of consumption growth? Third, what are the impacts of electrification and how can they be maximized, for example, through the design of the electrification program or the provision of complementary inputs? We highlight three general priorities and five key areas for future empirical research.

Kenneth Lee, Edward Miguel, Catherine Wolfram