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Fossil Fuel Subsidy Reform, Rent Management and Political Fragmentation in Developing Countries

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  • Matthew Lockwood

Abstract

Over the last decade, pressure to reduce subsidies for energy (especially fossil fuels) in developing countries has mounted, but reform is politically controversial. The debate on reform is dominated by a liberal narrative that employs an understanding of energy subsidies as political rent, based on public choice theory. Here, it is argued that this approach takes too static and limited a view of rent, and that engagement with theories of the state in the development process suggests a more dynamic view. The degree of centralisation of political power is also argued to be a key factor in the use and reform of subsidy. This application of the framework is then illustrated in the case of Indonesia. Finally, implications for reform strategies are drawn out.

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  • 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.
  • Handle: RePEc:taf:cnpexx:v:20:y:2015:i:4:p:475-494
    DOI: 10.1080/13563467.2014.923826
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    Cited by:

    1. 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).
    2. Sandu, Suwin & Yang, Muyi & Shi, Xunpeng & Chi, Yuanying, 2020. "A governance perspective on electricity industry development: The case of Papua New Guinea," Energy Policy, Elsevier, vol. 141(C).
    3. Jeroen Klomp, 2020. "Subsidizing power," Scottish Journal of Political Economy, Scottish Economic Society, vol. 67(3), pages 300-321, July.
    4. 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.
    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. 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.
    7. 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.
    8. 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.
    9. 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.
    10. Aleksandra Nowakowska & Agnieszka Rzeńca & Agnieszka Sobol, 2021. "Place-Based Policy in the “Just Transition” Process: The Case of Polish Coal Regions," Land, MDPI, vol. 10(10), pages 1-25, October.
    11. Sovacool, Benjamin K., 2017. "Reviewing, Reforming, and Rethinking Global Energy Subsidies: Towards a Political Economy Research Agenda," Ecological Economics, Elsevier, vol. 135(C), pages 150-163.
    12. Pegels, Anna & Altenburg, Tilman, 2020. "Latecomer development in a “greening” world: Introduction to the Special Issue," World Development, Elsevier, vol. 135(C).
    13. Jakob Skovgaard, 2017. "The devil lies in the definition: competing approaches to fossil fuel subsidies at the IMF and the OECD," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 17(3), pages 341-353, June.

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