Does regulation promote sustainable development outcomes? Empirical evidence from the indian electricity sector

There was an expectation that the independent regulatory institutions that India created for its electricity sector would drive the sector along a sustainable trajectory. However, there has been a dearth of empirical studies analyzing the effect of electricity sector regulation on sustainable sector outcomes. The paper in this context empirically examines whether electricity sector regulation influences the sectoral outcomes at the state level. For analytical purposes, the present study considers a sample of 12 Indian states (provinces). While it captures electricity sector regulation by constructing a composite index that it connotes as a "regulatory index," it applies a sustainable development framework that it operationalizes through an indicator-based approach to measure the sectoral outcomes. Finally, it employs the panel data estimation technique with a fixed-effect model to establish the relationship between regulation and sectoral outcomes. The results suggest that, while regulation is a crucial determinant of sectoral outcomes in the economic and environmental dimensions, social sector outcomes experience a negative impact. These results have clear policy implications for larger overarching policy questions of energy security and the sustainable development of the sector.