ABSTRACT In the post‐pandemic period, intensified energy price fluctuations, supply disruptions, and geopolitical tensions have tested national institutional capacities. This study examines the dynamic interaction between energy risks and government effectiveness using annual data from 25 European Union member states over 2008–2023, employing a Panel GMM‐VAR methodology. The results reveal that government effectiveness significantly reduces energy risks, while energy shocks do not directly impact institutional quality. This indicates that in economies with strong institutional frameworks, energy sector fluctuations do not undermine governance capacity but demonstrate institutional resilience as a buffer mechanism. Furthermore, government effectiveness is identified as a key determinant of economic growth, energy imports, and human capital development, whereas energy risks have short‐term stimulating effects on economic growth and foreign direct investment inflows. Overall, the findings suggest that within the European context, the relationship between energy risks and governance is unidirectional, institution‐driven, and rooted in structural stability.
SARITAŞ et al. (Sun,) studied this question.