Political economy aspects of fuel subsidies : a conceptual framework
AbstractWhile notoriously inefficient, fuel subsidies are widespread, and in many cases politically stable. This paper discusses and models various political economy aspects of fuel subsidies, focusing on gasoline and kerosene. Both economic and political are considered to explain differences in subsidies, with particular focus on democratic and autocratic governments. A political process is modeled whereby a promise of low fuel prices is used in democracies to attract voters, and in autocracies to mobilize support among key groups. Subsidies to fuels are viewed as either easier to observe, easier to commit to, easier to deliver, or better targeted at core groups, than other public goods or favors offered by rulers. Easier commitment and delivery than for regular public goods can explain the high prevalence of such policies in autocracies, and also in young democracies where the capacity to commit to or deliver complex public goods is not yet fully developed. The analysis provides a framework for empirical testing and verification.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 6392.
Date of creation: 01 Mar 2013
Date of revision:
Transport Economics Policy&Planning; Economic Theory&Research; Energy Production and Transportation; Transport and Environment; Public Sector Economics;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-04-13 (All new papers)
- NEP-ENE-2013-04-13 (Energy Economics)
- NEP-POL-2013-04-13 (Positive Political Economics)
- NEP-TRE-2013-04-13 (Transport Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kenneth B. Medlock & Ronald Soligo, 2002. "Car Ownership and Economic Development with Forecasts to the Year 2015," Journal of Transport Economics and Policy, London School of Economics and University of Bath, vol. 36(2), pages 163-188, May.
- Eric Chang & Miriam A. Golden, 2010. "Sources of Corruption in Authoritarian Regimes," Social Science Quarterly, Southwestern Social Science Association, vol. 91(1), pages 1-20.
- Elias Papaioannou & Gregorios Siourounis, 2007.
"Democratization And Growth,"
CEDI Discussion Paper Series
07-13, Centre for Economic Development and Institutions(CEDI), Brunel University.
- Papaioannou, Elias & Siourounis, Gregorios, 2008. "Democratization and Growth," CEPR Discussion Papers 6987, C.E.P.R. Discussion Papers.
- Elias Papaioannou & Gregorios Siourounis, 2008. "Democratization and Growth," Working Papers, University of Peloponnese, Department of Economics 00027, University of Peloponnese, Department of Economics.
- Deacon, Robert & Saha, Sarani, 2005. "Public Good Provision by Dictatorships: A Survey," University of California at Santa Barbara, Economics Working Paper Series qt1jk5b0vr, Department of Economics, UC Santa Barbara.
- Sterner, Thomas, 2007. "Fuel taxes: An important instrument for climate policy," Energy Policy, Elsevier, vol. 35(6), pages 3194-3202, June.
- Per G. Fredriksson & Xenia Matschke & Jenny Minier, 2008.
"Environmental Policy in Majoritarian Systems,"
2008-01, University of Connecticut, Department of Economics, revised Sep 2009.
- Henrik Hammar, Asa Lofgren and Thomas Sterner, 2004. "Political Economy Obstacles to Fuel Taxation," The Energy Journal, International Association for Energy Economics, International Association for Energy Economics, vol. 0(Number 3), pages 1-18.
- Fredriksson, Per G. & Millimet, D.L.Daniel L., 2004. "Comparative politics and environmental taxation," Journal of Environmental Economics and Management, Elsevier, vol. 48(1), pages 705-722, July.
- Joyce Dargay & Dermot Gately & Martin Sommer, 2007. "Vehicle Ownership and Income Growth, Worldwide: 1960-2030," The Energy Journal, International Association for Energy Economics, International Association for Energy Economics, vol. 0(Number 4), pages 143-170.
- Storchmann, Karl, 2005. "Long-Run Gasoline demand for passenger cars: the role of income distribution," Energy Economics, Elsevier, vol. 27(1), pages 25-58, January.
- Francisco H.G. Ferreira & Julian Messina & Jamele Rigolini & Luis-Felipe López-Calva & Maria Ana Lugo & Renos Vakis, 2013. "Economic Mobility and the Rise of the Latin American Middle Class," World Bank Publications, The World Bank, number 11858.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi).
If references are entirely missing, you can add them using this form.