Work detail

Three Essays in Development Economics

Author: Mgr. Petra Valíčková (21.4.2021)
Year: 2021 - summer
Leaders: doc. Ing. Tomáš Cahlík CSc.
Work type: Dissertations
Language: English
Pages: 235
Awards and prizes:
Abstract: This dissertation thesis touches on some important aspects of
development, including financial development and improved access
to reliable energy sources, regional integration and expanded
opportunities for trade. This thesis was written to help guide policy
reforms especially in developing countries to expand sources of
growth and put countries on track to better meet their long-term
development goals, including a better and more sustainable future for
everyone. This dissertation consists of three papers.
In the first paper I investigate the empirical evidence on the
relationship between financial development and economic growth. In
doing so, I assessed over 270 studies for their potential inclusion in a
meta-analysis. From those studies that contained an empirical estimate
of the finance-growth relationship, I compiled 1,334 coefficients and
coded study characteristics for each. Taking the reported estimates
together, I find a positive link between financial development and
economic growth, but with widely varying individual estimates. By
applying a multi-variate meta-regression, I explain the variation in
reported results, stemming not only from differences in research
design (by authors addressing or ignoring potential endogeneity
issues) but also from real drivers (different regional and time effects).
In the second paper, I estimate the costs of scaling up access to
electricity through the main grid. I do so in view of the limited access
to modern electricity services among countries in Sub-Saharan Africa,
despite its widely recognised importance for human and economic
development. Specifically, I estimate the incremental costs of scaling
up electricity access in the Southern African Power Pool. I do so by
developing and applying a least-cost power system generation
despatch and investment model for the region. My analysis shows that
at the current rate of progress in providing households with access,
less than 60% of the population in SAPP will have access to electricity
by 2030. Yet, the incremental costs of providing access are relatively
low when compared to the overall forward-looking system generation
cost of serving the current households and the non-residential sectors
of the economy. In fact, the resulting cost is below of what a typical
household pays for poor alternatives to electricity, such as kerosene
for lighting, implying that policy makers should accelerate the rate at
which electricity access is provided.
The lack of access to modern electricity services in Sub-Saharan
Africa is often linked to affordability issues. With this in mind, in the
third paper I look at how certain policy actions could reduce the cost
of providing electricity access, and therefore help to shift towards
more sustainable sources of energy in the region. Specifically, I look
at how increased power trade and electricity interconnection among
countries in SAPP could reduce the underlying cost of generation and
hence the costs of supply. I find that the existing interconnection
capacity in the SAPP region is not utilised efficiently and that
countries are foregoing some benefits of power trade in the short term
and benefits of taking a regional approach to power system planning.
Utilising the existing interconnector capacity efficiently and building
and using new interconnectors when economically beneficial to do so
reduces forward looking costs of generation and transmission
interconnector investments by almost 6% compared to no trade. The
lower cost helps to reduce the affordability constraint related to
electricity access, with access to reliable energy being one of the key
drivers of human and economic development. I also find that trade can
significantly contribute towards meeting other policy objectives, such
as reducing greenhouse gas emissions. With trade, less coal fired
generation is required, particularly in South Africa and Zimbabwe,
and more hydro and solar photovoltaics renewable generation
capacity is developed elsewhere in the region.
June 2023


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