The Political Economy of Energy Subsidy Reform

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Foreword

determinants of political incentives to pursue economic development, Philip Keefer (who helped to put together the conceptual framework at the concept note stage), and then to David Victor, professor of political science at the University of California, San Diego. Subsequently the composition of all the country teams contributing to this volume has been a mix of macroeconomists as well as poverty, social development, and energy specialists who have benefited greatly from collaboration with global and country-level experts. We hope that the experiences presented in these case studies will benefit not only World Bank teams but also development practitioners and policy makers anywhere who are considering reforms. Ana Revenga Senior Director Poverty and Equity Global Practice The World Bank

The Political Economy of Energy Subsidy Reform • http://dx.doi.org/10.1596/978-1-4648-1007-7

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The Political Economy of Energy Subsidy Reform

Published on Mar 3, 2017

World Bank Publications

"This book proposes a simple framework for understanding the political economy of subsidy reform and applies it to four in-depth country studies covering more than 30 distinct episodes of reform. Five key lessons emerge. First, energy subsidies often follow a life cycle, beginning as a way to stabilize prices and reduce exposure to price volatility for low-income consumers. However, as they grow in size and political power, they become entrenched. Second, subsidy reform strategies vary because the underlying political economy problems vary. When benefits are concentrated, satisfying (or isolating) interest groups with alternative policies is an important condition for effective reform. When benefits are diffuse, it can be much harder to identify and manage the political coalition needed for reform. Third, governments vary in their administrative and political capacities to implement difficult energy subsidy reforms. Fourth, improvements in social protection systems are often critical t

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