Investigating the Impact of Hydropower Investment on Economic Growth and Development: Bhutan's Experience from the 1980s to 2017

This thesis comprises two interrelated papers. Chapter 3 examines the impact of hydropower development on Bhutan’s GDP growth (1980 until 2017) using a two-stage least squares regression. The study found that domestic investments, domestic labour and hydropower investments foster economic growth in Bhutan, whereas foreign labour and the Hicks neutral technological change has no significant impact on economic growth. Chapter 4 investigates the impact of rural electrification on household non-farming income activities in rural Bhutan using clogit and the difference-in-differences approach. The findings indicate that rural electrification has had a positive effect on improving household non-farming income diversification.