Contemporary Macroeconomic Issues in Human Development Through Electricity Access and Institutional Quality: Evidence from South Asia

Abstract

The contemporary issues in macroeconomics involve restructuring policies and redistributing resources. The reformulation of policy aims to enhance human welfare. This led to shedding light on the importance of institutional contribution to better provision of social assistance for human development, such as electricity access. The current study aims to identify the impact of electricity access on human development with the interaction of institutional quality in South Asian countries. The data used for the investigation ranged from 1996 to 2021. Having observed the existence of cross-sectional dependence as well as heteroscedasticity in its trend, the Driscoll-Kraay (D-K) technique was used in this study. This study runs 3 distinct models for South Asian countries in a macroeconomic framework. The findings indicate the variables’ stationarity results are mixed and cointegration exists between variables. Moreover, the major results of the D-K model concluded that access to electricity with institutional quality has long-term positively and significantly impacted the human development index. Both jointly contributed to social and economic progress, improved health systems, lower poverty, and a slew of other enhancements that boosted human development levels more swiftly and efficiently. Thus, governments may create an atmosphere that promotes human growth by increasing electricity access and improving the quality of institutions.