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Abstract

What are the determinants of policy choice, and how effective are policies in facilitating the diffusion of clean technologies to developing countries? To answer this question, I create a novel dataset on the adoption of policies to incentivise the diffusion of compact fluorescent lamps (CFL) in 72 low and middle-income countries spanning 1993–2013. The empirical model uses the instrumental variable two-stage least squares (IV-2SLS) methodology to evaluate the effectiveness of policies such as information provision, CFL subsidies and banning the use of incandescent bulbs (IB), and analyses the factors that increase the likelihood of adopting these policies. Results suggest that information provision has had a positive effect on CFL diffusion, while subsidies have had an insignificant effect on diffusion across many countries, and a negative effect in some. The ban on IB is found to not affect CFL diffusion, which attests to the importance of effectiveness in policy implementation. In addition, more effective governments are more likely to provide information, and less likely to subsidise CFL. The results of this paper have important policy implications, given that little is known about how policies work in developing countries, where the greatest potential for cheap emissions abatement lies.

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