Author
Listed:
- Richard J. McAlexander
- Joonseok Yang
- Johannes Urpelainen
Abstract
Why do some governments subsidize gasoline consumption, despite its very high economic and environmental costs? We answer this question by examining how a state's political regime and level of institutional capacity jointly determine its level of fossil fuel price distortion. We find that, without sufficient institutional capacity, democratic regimes do not necessarily provide less fuel subsidies, as those governments are unable to pursue other more efficient welfare policies. Using data on monthly domestic gasoline prices from 2003 to 2015, we demonstrate that democratic governments with high institutional capacity are less likely to control domestic gasoline prices. Democratic institutions and strong institutional capacity jointly mitigate the effect of the benchmark oil price increases on the domestic price. These results suggest that the combination of motive (democratic accountability) and means (institutional capacity) can help countries avoid inefficient subsidy policies. ¿Por qué algunos gobiernos subsidian el consumo de gasolina, a pesar de sus altísimos costos económicos y ambientales? Respondemos a esta pregunta examinando cómo el régimen político y el nivel de capacidad institucional de un estado determinan conjuntamente su nivel de distorsión de los precios de los combustibles fósiles. Encontramos que, sin suficiente capacidad institucional, los regímenes democráticos no necesariamente otorgan menos subsidios a los combustibles, ya que esos gobiernos son incapaces de aplicar otras políticas de bienestar más eficientes. Utilizando datos sobre los precios internos mensuales de la gasolina entre 2003 y 2015, demostramos que los gobiernos democráticos con alta capacidad institucional tienen menos probabilidades de controlar los precios internos de la gasolina: las instituciones democráticas y una fuerte capacidad institucional mitigan conjuntamente el efecto de los aumentos del precio de referencia del petróleo. sobre el precio interno. Estos resultados sugieren que la combinación de motivo (responsabilidad democrática) y medios (capacidad institucional) puede ayudar a los países a evitar políticas de subsidios ineficientes. 尽管汽油消费的经济成本和环境成本非常高,为何一些政府仍然对汽油消费进行补贴?为回答该问题,我们研究了一个国家的政治制度和制度能力水平如何共同决定其化石燃料价格的扭曲程度。我们发现,如果没有足够的制度能力,民主政权不一定会提供更少的燃料补贴,因为这些政府无法推行其他更有效的福利政策。通过使用2003‐2015年不同国家的国内汽油月度价格数据,我们证明,具有较高制度能力的民主政府不太可能控制国内汽油价格:民主制度和强大的制度能力共同减轻了基准油价上涨对国内价格的影响。这些结果表明,动机(民主问责)和手段(制度能力)的结合能帮助各国避免低效的补贴政策。.
Suggested Citation
Richard J. McAlexander & Joonseok Yang & Johannes Urpelainen, 2025.
"Political regime, institutional capacity, and inefficient policy: Evidence from gasoline subsidies,"
Review of Policy Research, Policy Studies Organization, vol. 42(4), pages 883-904, July.
Handle:
RePEc:bla:revpol:v:42:y:2025:i:4:p:883-904
DOI: 10.1111/ropr.12580
Download full text from publisher
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:bla:revpol:v:42:y:2025:i:4:p:883-904. 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.
We have no bibliographic references for this item. You can help adding them by using 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: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/ipsonea.html .
Please note that corrections may take a couple of weeks to filter through
the various RePEc services.