IDEAS home Printed from https://ideas.repec.org/a/eee/wdevel/v157y2022ics0305750x22001255.html
   My bibliography  Save this article

An exploration of the association between fuel subsidies and fuel riots

Author

Listed:
  • McCulloch, Neil
  • Natalini, Davide
  • Hossain, Naomi
  • Justino, Patricia

Abstract

Between 2005 and 2018, 41 countries had at least one riot directly associated with popular demand for fuel. We make use of a new international dataset on fuel riots to explore the effects of fuel prices and price regimes on fuel riots. In line with prior expectations, we find that large domestic fuel price shocks - often linked to international price shocks - are a key driver of riots. In addition, we report a novel result: fuel riots are closely associated with domestic price regimes. Countries that maintain fixed price regimes - notably net energy exporters - tend to have large fuel subsidies. When such subsidies become unsustainable, domestic price adjustments are large, often leading to riots.

Suggested Citation

  • McCulloch, Neil & Natalini, Davide & Hossain, Naomi & Justino, Patricia, 2022. "An exploration of the association between fuel subsidies and fuel riots," World Development, Elsevier, vol. 157(C).
    • Handle: RePEc:eee:wdevel:v:157:y:2022:i:c:s0305750x22001255
    DOI: 10.1016/j.worlddev.2022.105935
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0305750X22001255
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.worlddev.2022.105935?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Blair, Graeme & Christensen, Darin & Rudkin, Aaron, 2021. "Do Commodity Price Shocks Cause Armed Conflict? A Meta-Analysis of Natural Experiments," American Political Science Review, Cambridge University Press, vol. 115(2), pages 709-716, May.
    2. Oeindrila Dube & Juan F. Vargas, 2013. "Commodity Price Shocks and Civil Conflict: Evidence from Colombia," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 80(4), pages 1384-1421.
    3. Rentschler, Jun & Kornejew, Martin & Bazilian, Morgan, 2017. "Fossil fuel subsidy reforms and their impacts on firms," Energy Policy, Elsevier, vol. 108(C), pages 617-623.
    4. Patricia Justino & Bruno Martorano, 2019. "Redistributive Preferences and Protests in Latin America," Journal of Conflict Resolution, Peace Science Society (International), vol. 63(9), pages 2128-2154, October.
    5. Natalini, Davide & Bravo, Giangiacomo & Newman, Edward, 2020. "Fuel riots - definition, evidence and policy implications for a new type of energy-related conflict," SocArXiv p83jr, Center for Open Science.
    6. Jun Rentschler & Morgan Bazilian, 2017. "Policy Monitor—Principles for Designing Effective Fossil Fuel Subsidy Reforms," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 11(1), pages 138-155.
    7. Collins, William J. & Margo, Robert A., 2007. "The Economic Aftermath of the 1960s Riots in American Cities: Evidence from Property Values," The Journal of Economic History, Cambridge University Press, vol. 67(4), pages 849-883, December.
    8. Frederick van der Ploeg, 2011. "Natural Resources: Curse or Blessing?," Journal of Economic Literature, American Economic Association, vol. 49(2), pages 366-420, June.
    9. Alia Aghajanian & Patricia Justino & Jean-Pierre Tranchant, 2020. "Riots and social capital in urban India," WIDER Working Paper Series wp-2020-42, World Institute for Development Economic Research (UNU-WIDER).
    10. Rentschler, Jun, 2016. "Incidence and impact: The regional variation of poverty effects due to fossil fuel subsidy reform," Energy Policy, Elsevier, vol. 96(C), pages 491-503.
    11. Sun, Yuying & Zhang, Xun & Hong, Yongmiao & Wang, Shouyang, 2019. "Asymmetric pass-through of oil prices to gasoline prices with interval time series modelling," Energy Economics, Elsevier, vol. 78(C), pages 165-173.
    12. Naomi Hossain, 2018. "How the international media framed ‘food riots’ during the global food crises of 2007–12," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 10(3), pages 677-688, June.
    13. Gabriela Inchauste & David G. Victor, 2017. "The Political Economy of Energy Subsidy Reform," World Bank Publications - Books, The World Bank Group, number 26216, December.
    14. Ted Robert Gurr, 1970. "Sources of Rebellion in Western Societies: Some Quantitative Evidence," The ANNALS of the American Academy of Political and Social Science, , vol. 391(1), pages 128-144, September.
    15. Skovgaard,Jakob & van Asselt,Harro (ed.), 2018. "The Politics of Fossil Fuel Subsidies and their Reform," Cambridge Books, Cambridge University Press, number 9781108416795.
    16. Cheon, Andrew & Urpelainen, Johannes & Lackner, Maureen, 2013. "Why do governments subsidize gasoline consumption? An empirical analysis of global gasoline prices, 2002–2009," Energy Policy, Elsevier, vol. 56(C), pages 382-390.
    17. Coady, David & Parry, Ian & Sears, Louis & Shang, Baoping, 2017. "How Large Are Global Fossil Fuel Subsidies?," World Development, Elsevier, vol. 91(C), pages 11-27.
    18. Jun Rentschler & Morgan Bazilian, 2017. "Reforming fossil fuel subsidies: drivers, barriers and the state of progress," Climate Policy, Taylor & Francis Journals, vol. 17(7), pages 891-914, October.
    19. Natalini, Davide & Bravo, Giangiacomo & Newman, Edward, 2020. "Fuel riots: definition, evidence and policy implications for a new type of energy-related conflict," Energy Policy, Elsevier, vol. 147(C).
    20. Michael L. Ross & Chad Hazlett & Paasha Mahdavi, 2017. "Global progress and backsliding on gasoline taxes and subsidies," Nature Energy, Nature, vol. 2(1), pages 1-6, January.
    21. Graeme Graeme Blair & Darin Christensen & Aaron Rudkin, 2020. "Do Commodity Price Shocks Cause Armed Conflicts? A Meta-Analysis of Natural Experiments," Empirical Studies of Conflict Project (ESOC) Working Papers 21, Empirical Studies of Conflict Project.
    22. Arze del Granado, Francisco Javier & Coady, David & Gillingham, Robert, 2012. "The Unequal Benefits of Fuel Subsidies: A Review of Evidence for Developing Countries," World Development, Elsevier, vol. 40(11), pages 2234-2248.
    23. McCulloch, Neil & Moerenhout, Tom & Yang, Joonseok, 2021. "Fuel subsidy reform and the social contract in Nigeria: A micro-economic analysis," Energy Policy, Elsevier, vol. 156(C).
    24. Soile, Ismail & Mu, Xiaoyi, 2015. "Who benefit most from fuel subsidies? Evidence from Nigeria," Energy Policy, Elsevier, vol. 87(C), pages 314-324.
    25. Matthew Lockwood, 2015. "Fossil Fuel Subsidy Reform, Rent Management and Political Fragmentation in Developing Countries," New Political Economy, Taylor & Francis Journals, vol. 20(4), pages 475-494, August.
    26. Barron, Patrick & Kaiser, Kai & Pradhan, Menno, 2004. "Local conflict in Indonesia : Measuring incidence and identifying patterns," Policy Research Working Paper Series 3384, The World Bank.
    27. Peter Erickson & Harro Asselt & Doug Koplow & Michael Lazarus & Peter Newell & Naomi Oreskes & Geoffrey Supran, 2020. "Why fossil fuel producer subsidies matter," Nature, Nature, vol. 578(7793), pages 1-4, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ioannis Dokas & Georgios Oikonomou & Minas Panagiotidis & Eleftherios Spyromitros, 2023. "Macroeconomic and Uncertainty Shocks’ Effects on Energy Prices: A Comprehensive Literature Review," Energies, MDPI, vol. 16(3), pages 1-35, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cecile Couharde & Sara Mouhoud, 2020. "Fossil Fuel Subsidies, Income Inequality, And Poverty: Evidence From Developing Countries," Journal of Economic Surveys, Wiley Blackwell, vol. 34(5), pages 981-1006, December.
    2. Christian Elliott & Steven Bernstein & Matthew Hoffmann, 2022. "Credibility dilemmas under the Paris agreement: explaining fossil fuel subsidy reform references in INDCs," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 22(4), pages 735-759, December.
    3. McCulloch, Neil & Moerenhout, Tom & Yang, Joonseok, 2021. "Fuel subsidy reform and the social contract in Nigeria: A micro-economic analysis," Energy Policy, Elsevier, vol. 156(C).
    4. Schaffitzel, Filip & Jakob, Michael & Soria, Rafael & Vogt-Schilb, Adrien & Ward, Hauke, 2020. "Can government transfers make energy subsidy reform socially acceptable? A case study on Ecuador," Energy Policy, Elsevier, vol. 137(C).
    5. Nils Ohlendorf & Michael Jakob & Jan Christoph Minx & Carsten Schröder & Jan Christoph Steckel, 2021. "Distributional Impacts of Carbon Pricing: A Meta-Analysis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 78(1), pages 1-42, January.
    6. Dorband, Ira Irina & Jakob, Michael & Kalkuhl, Matthias & Steckel, Jan Christoph, 2019. "Poverty and distributional effects of carbon pricing in low- and middle-income countries – A global comparative analysis," World Development, Elsevier, vol. 115(C), pages 246-257.
    7. Aiman Albatayneh & Adel Juaidi & Francisco Manzano-Agugliaro, 2023. "The Negative Impact of Electrical Energy Subsidies on the Energy Consumption—Case Study from Jordan," Energies, MDPI, vol. 16(2), pages 1-17, January.
    8. Auktor, Georgeta Vidican & Loewe, Markus, 2021. "Subsidy reforms in the Middle East and North Africa: Strategic options and their consequences for the social contract," IDOS Discussion Papers 12/2021, German Institute of Development and Sustainability (IDOS).
    9. Natalini, Davide & Bravo, Giangiacomo & Newman, Edward, 2020. "Fuel riots: definition, evidence and policy implications for a new type of energy-related conflict," Energy Policy, Elsevier, vol. 147(C).
    10. Ioannis Dokas & Georgios Oikonomou & Minas Panagiotidis & Eleftherios Spyromitros, 2023. "Macroeconomic and Uncertainty Shocks’ Effects on Energy Prices: A Comprehensive Literature Review," Energies, MDPI, vol. 16(3), pages 1-35, February.
    11. Boudekhdekh, Karim, 2022. "A comparative analysis of energy subsidy in the MENA region," MPRA Paper 115275, University Library of Munich, Germany.
    12. Mathieu Blondeel & Jeff Colgan & Thijs Van deGraaf, 2019. "What Drives Norm Success? Evidence from Anti–Fossil FuelCampaigns," Global Environmental Politics, MIT Press, vol. 19(4), pages 63-84, November.
    13. Khalid, Syed Adnan & Salman, Verda, 2020. "“Welfare impact of electricity subsidy reforms in Pakistan: A micro model study”," Energy Policy, Elsevier, vol. 137(C).
    14. Daniele Malerba, 2022. "The Effects of Social Protection and Social Cohesion on the Acceptability of Climate Change Mitigation Policies: What Do We (Not) Know in the Context of Low- and Middle-Income Countries?," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(3), pages 1358-1382, June.
    15. Nils Ohlendorf & Michael Jakob & Jan Christoph Minx & Carsten Schröder & Jan Christoph Steckel, 2018. "Distributional Impacts of Climate Mitigation Policies - a Meta-Analysis," Discussion Papers of DIW Berlin 1776, DIW Berlin, German Institute for Economic Research.
    16. Lin, Boqiang & Xu, Mengmeng, 2019. "Good subsidies or bad subsidies? Evidence from low-carbon transition in China's metallurgical industry," Energy Economics, Elsevier, vol. 83(C), pages 52-60.
    17. Scobie, Michelle, 2017. "Fossil fuel reform in developing states: The case of Trinidad and Tobago, a petroleum producing small Island developing State," Energy Policy, Elsevier, vol. 104(C), pages 265-273.
    18. Alireza Ghadertootoonchi & Maryam Fani & Masoume Bararzadeh, 2020. "The effect of energy subsidies on the sustainability of economy, society and environment: A case study of Iran," ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT, FrancoAngeli Editore, vol. 2020(2), pages 93-129.
    19. Pegels, Anna & Altenburg, Tilman, 2020. "Latecomer development in a “greening” world: Introduction to the Special Issue," World Development, Elsevier, vol. 135(C).
    20. Vadlamannati, Krishna Chaitanya & de Soysa, Indra, 2020. "Oil price volatility and political unrest: Prudence and protest in producer and consumer societies, 1980–2013," Energy Policy, Elsevier, vol. 145(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:wdevel:v:157:y:2022:i:c:s0305750x22001255. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/worlddev .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.