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Energy Subsidy Reform in Iran

In: The Middle East Economies in Times of Transition

Author

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  • Djavad Salehi-Isfahani

Abstract

On December 19, 2010, Iran embarked on an ambitious reform of its extensive subsidies. Energy prices that had been kept well below international levels for decades were raised by a factor of 3 to 9 and bread prices were doubled. Energy price reform had been discussed for at least a decade, and the specific plan for this particular reform program was announced by president Ahmadinejad in 2008 and enacted into law in January 2010. This attempt at reform ended a huge government subsidy, estimated at upwards of $70 billion per year, or nearly $1000 per person per year. It was distributed highly unequally and caused Iran’s productive sectors to become the least efficient in the world (Guillaume et al 2011, IEA 2010, Salehi-Isfahani et al 2012).

Suggested Citation

  • Djavad Salehi-Isfahani, 2016. "Energy Subsidy Reform in Iran," International Economic Association Series, in: Ishac Diwan & Ahmed Galal (ed.), The Middle East Economies in Times of Transition, chapter 6, pages 186-195, Palgrave Macmillan.
    • Handle: RePEc:pal:intecp:978-1-137-52977-0_7
    DOI: 10.1007/978-1-137-52977-0_7
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    Cited by:

    1. Stéphane Gauthier & Taraneh Tabatabai, 2019. "How incentives matter? An illustration from the targeted subsidies reform in Iran," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 52(1), pages 97-125, January.
    2. Salehi-Isfahani, Djavad & Mostafavi-Dehzooei, Mohammad H., 2018. "Cash transfers and labor supply: Evidence from a large-scale program in Iran," Journal of Development Economics, Elsevier, vol. 135(C), pages 349-367.
    3. Berman, Matthew, 2018. "Resource rents, universal basic income, and poverty among Alaska’s Indigenous peoples," World Development, Elsevier, vol. 106(C), pages 161-172.
    4. Stephane Gauthier & Taraneh Tabatabai, 2017. "How incentives matter ? An illustration from the Targeted Subsidies reform in Iran," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01542799, HAL.

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