Work in Progress

Work In Progress

Labor Participation and Renewable Adoption Across Developing Countries: Identification and Mechanisms (Work in Progress)

Co-authored with Ankit Singh Kharwar

Abstract: This paper examines how labor force participation influences the energy transition in developing economies, focusing on the shift from fossil fuels to renewable energy. Using an unbalanced panel of 70 countries from 2002–2021, we estimate fixed-effects and two-step GMM models with Driscoll–Kraay standard error to address heterogeneity, cross-sectional dependence, and endogeneity. The results show that higher labor force participation significantly reduces fossil fuel consumption and increases renewable energy uptake. Mediation analysis identifies regulatory quality as a channel through which labor participation promotes renewables, while moderation tests show that government effectiveness and rule of law amplify this effect. Robustness checks confirm the causal interpretation. These findings highlight labor force dynamics as an underexplored determinant of national energy portfolios. Policy implications point to labor market reforms, skills upgrading, and governance improvements as levers to accelerate renewable adoption in developing countries.

Fiscal Space and Environmental Management: Enabling Clean Energy Investment in Developing Countries (Work in Progress)

Abstract: While the financing gap for renewable energy in developing countries is widely acknowledged, the role of fiscal space in shaping access to international finance for clean energy remains underexplored. Existing studies have examined financial development, the role of green finance in the energy transition, and climate-related fiscal tools, but none have empirically tested how the fiscal position of a country influences its ability to attract international finance for clean energy. This study addresses this gap by investigating whether fiscal space, proxied by net lending/borrowing, affects the level of international finance received for clean energy. Using panel data from 32 developing countries during the period 2000-2021, the analysis uses fixed effects and IV-GMM estimates with Driscoll-Kraay standard errors to control for endogeneity and cross-sectional dependence. The results reveal a positive relationship between fiscal space and international finance for clean energy. Countries with a lower GDP per capita receive more support, whereas renewable energy consumption does not show a significant effect. These findings suggest that stronger fiscal positions may improve donor confidence and signal investor readiness. Since international clean energy finance plays a critical role in scaling low-carbon technologies, these results highlight fiscal space as a key enabling factor in environmental management. Improved fiscal capacity allows governments to plan and implement clean energy strategies more effectively, supporting broader SDG objectives, particularly SDG 7 (affordable and clean energy) and SDG 13 (climate action). Thus, improving fiscal management could be an important strategy for developing countries to access greater international support for clean energy. Thus, improving fiscal management could be an important strategy for developing countries to access greater international support for clean energy.