Good Governance in Large Energy-Consuming Economies: The Role of Energy Security and Environmental Sustainability Policies

Shirazi, Masoud

doi:10.22059/ier.2026.412217.1008418

Good Governance in Large Energy-Consuming Economies: The Role of Energy Security and Environmental Sustainability Policies

Document Type : Research Paper

Author

Masoud Shirazi

Faculty of Economics, University of Tehran, Tehran, Iran.

10.22059/ier.2026.412217.1008418

Abstract

The cultural, political, social, and economic dimensions of global stability are sensitive to the contribution of portfolio decisions of primary energy sources, especially for the world’s large energy-consuming economies (L.E.C.E). This research aims to assess the impact of energy security policies (E.S.P)—the diversification of primary energy supply (D.P.E.S) and primary energy demand (D.P.E.D), and the environmental sustainability policy (E.V.P)—the clean energy portfolio (N.C.F.P), with the control variables including human development index (H.D.I), per capita gross domestic product (G.D.P), and economic complexity (E.C) on the performance of governance indices in a panel of twenty-five L.E.C.Es from 1998 to 2020. The findings support the causal and long-run relationships across the governance systems, applying the dynamic panel and panel cointegration models. The results also show that the impacts of E.S.P and E.V.P on the governance indices are heterogeneous. Specifically, the D.P.E.D positively affects the voice and accountability, political stability, and regulatory quality. Moreover, the development of D.P.E.S enhances the voice and accountability, government effectiveness, and control of corruption. Further, the government effectiveness and control of corruption are also positively affected in response to the N.C.F.P. Collectively, the government effectiveness, regulatory quality, rule of law, and control of corruption are more challenging aspects of good governance to achieve in response to energy system development. Accordingly, the objective priorities of good governance are necessary to improve the stability of the countries, especially when the E.S.P and E.V.P are formulated and implemented.

Keywords

diversification of primary energy

dynamic panel model

energy policy

good governance

large energy-consuming economies

Subjects

Resource Economics

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