Economic and Social Effects of Energy Sector Reforms on Sustainable Economic Growth

Sustainable economic growth needs a sustainable energy supply. In order to accomplish this goal, good economic governance incorporating energy policy should implement reforms that will increase economic efficiency and social prosperity. The sector’s reform experience goes back to the beginning of 1990s, indicating that existing literature has been limited by a relatively short period of time, inadequate hypothesis cross-testing and without appropriate panel-data analysis. Therefore there is a strong need for the systematic analysis that would include EU countries and Croatia as the new EU Member State, a broader range of issues related to energy sector reforms within a longer time frame to examine whether the empirical evidence supports the logic of reforms and to compare the existing evidence on the reform determinants and performance. So far the findings on some issues have been limited and inconclusive. The goal of the research is to better understand the reform process by providing solid economic evidence on energy reform results and its economic and social impacts on sustainable growth. The aim of the research within this project is to address several related issues: 1) internal and external factors that will further influence the progress of reforms, especially in the EU; 2) macroeconomic performance, institutional settings, regulatory prudence and sector governance as the important wider framework; 3) measuring the economic impact of energy reforms in terms of economic efficiency, rate of investments, competitiveness and economic growth; 4) testing the existing risk management models and developing a novel approach to assessing and hedging the risks in the energy market; 5) measuring the social impact of energy reforms in terms of coverage of energy services and welfare; 6) evaluation of the energy reforms impact on long-term and sustainable economic growth. The research will be performed by combining economic and technical approach and research methods.