The Political Economy of Energy Subsidy Reform
This book proposes a simple framework for understanding the political economy of subsidy reform and applies it to four in-depth country studies covering more than 30 distinct episodes of reform. Five key lessons emerge. First, energy subsidies often follow a life cycle, beginning as a way to stabili...
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| Language: | English en_US |
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Washington, DC: World Bank
2017
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| Online Access: | http://hdl.handle.net/10986/26216 |
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okr-10986-262162021-04-23T14:04:34Z The Political Economy of Energy Subsidy Reform Inchauste, Gabriela Victor, David G. Inchauste, Gabriela Victor, David G. Addo, Sheila Bazilian, Morgan Beaton, Christopher Gallina, Andrea Mansur, Yusuf Oguah, Sanuel Sánchez, Miguel Eduardo Serajuddin, Umar Wai-Poi, Matthew SUBSIDY REFORM ELECTRICITY LPG POLITICAL ECONOMY DISTRIBUTIONAL IMPACT GASOLINE ENERGY MITIGATING MEASURES DIESEL LIQUEFIED PETROLEUM GAS This book proposes a simple framework for understanding the political economy of subsidy reform and applies it to four in-depth country studies covering more than 30 distinct episodes of reform. Five key lessons emerge. First, energy subsidies often follow a life cycle, beginning as a way to stabilize prices and reduce exposure to price volatility for low-income consumers. However, as they grow in size and political power, they become entrenched. Second, subsidy reform strategies vary because the underlying political economy problems vary. When benefits are concentrated, satisfying or isolating) interest groups with alternative policies is an important condition for effective reform. When benefits are diffuse, it can be much harder to identify and manage the political coalition needed for reform. Third, governments vary in their administrative and political capacities to implement difficult energy subsidy reforms. Fourth, improvements in social protection systems are often critical to the success of reforms because they make it possible to target assistance to those most in need. Finally, the most interesting cases involve governments that take a strategic approach to the challenges of political economy. In these settings, fixing energy subsidies is central to the governments’ missions of retaining political power and reorganizing how the government delivers benefits to the population. These cases are examples of “reform engineering,” where governments actively seek to create the capacity to implement alternative policies, depoliticize tariffs, and build credibility around alternative policies. The most successful reforms involve active efforts by policy leaders to identify the political forces supporting energy subsidies and redirect or inoculate them. 2017-03-07T20:26:32Z 2017-03-07T20:26:32Z 2017-03-07 Book 978-1-4648-1007-7 http://hdl.handle.net/10986/26216 English en_US Directions in Development--Public Sector Governance; CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank Washington, DC: World Bank Publications & Research Publications & Research :: Publication Africa East Asia and Pacific Latin America & Caribbean Middle East and North Africa Dominican Republic Ghana Indonesia Jordan |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
SUBSIDY REFORM ELECTRICITY LPG POLITICAL ECONOMY DISTRIBUTIONAL IMPACT GASOLINE ENERGY MITIGATING MEASURES DIESEL LIQUEFIED PETROLEUM GAS |
| spellingShingle |
SUBSIDY REFORM ELECTRICITY LPG POLITICAL ECONOMY DISTRIBUTIONAL IMPACT GASOLINE ENERGY MITIGATING MEASURES DIESEL LIQUEFIED PETROLEUM GAS Inchauste, Gabriela Victor, David G. The Political Economy of Energy Subsidy Reform |
| geographic_facet |
Africa East Asia and Pacific Latin America & Caribbean Middle East and North Africa Dominican Republic Ghana Indonesia Jordan |
| relation |
Directions in Development--Public Sector Governance; |
| description |
This book proposes a simple framework for understanding the political economy of subsidy reform and applies it to four in-depth country studies covering more than 30 distinct episodes of reform. Five key lessons emerge. First, energy subsidies often follow a life cycle, beginning as a way to stabilize prices and reduce exposure to price volatility for low-income consumers. However, as they grow in size and political power, they become entrenched. Second, subsidy reform strategies vary because the underlying political economy problems vary. When benefits are concentrated, satisfying or isolating) interest groups with alternative policies is an important condition for effective reform. When benefits are diffuse, it can be much harder to identify and manage the political coalition needed for reform. Third, governments vary in their administrative and political capacities to implement difficult energy subsidy reforms. Fourth, improvements in social protection systems are often critical to the success of reforms because they make it possible to target assistance to those most in need. Finally, the most interesting cases involve governments that take a strategic approach to the challenges of political economy. In these settings, fixing energy subsidies is central
to the governments’ missions of retaining political power and reorganizing how the government delivers benefits to the population. These cases are examples of “reform engineering,” where governments actively seek to create the capacity to implement alternative policies, depoliticize tariffs, and build credibility around alternative policies.
The most successful reforms involve active efforts by policy leaders to identify the political forces supporting energy subsidies and redirect or inoculate them. |
| author2 |
Inchauste, Gabriela |
| author_facet |
Inchauste, Gabriela Inchauste, Gabriela Victor, David G. |
| format |
Book |
| author |
Inchauste, Gabriela Victor, David G. |
| author_sort |
Inchauste, Gabriela |
| title |
The Political Economy of Energy Subsidy Reform |
| title_short |
The Political Economy of Energy Subsidy Reform |
| title_full |
The Political Economy of Energy Subsidy Reform |
| title_fullStr |
The Political Economy of Energy Subsidy Reform |
| title_full_unstemmed |
The Political Economy of Energy Subsidy Reform |
| title_sort |
political economy of energy subsidy reform |
| publisher |
Washington, DC: World Bank |
| publishDate |
2017 |
| url |
http://hdl.handle.net/10986/26216 |
| _version_ |
1764461190110511104 |