<b>The limits of cross-border power-grid interconnection for human development</b>

Using a panel dataset covering 183 countries and territories from 1990 to 2023, we examine this relationship through fixed-effects models. We find a robust inverted U-shaped association between cross-border grid interconnection and human development: interconnection yields positive benefits at lower levels, but its marginal returns decline as interconnection expands.

This relationship varies across regions, income groups and forms of proximity. Geographic, economic, institutional and technological proximity jointly shape both the strength of the association and the threshold at which benefits begin to diminish. Our findings suggest that expanding cross-border grid interconnection alone is insufficient to sustain developmental gains; regional coordination and institutional compatibility are crucial for translating interconnection into inclusive human development outcomes.</b></p>