Fuel and Food Price Subsidies - Issues and Reform Options
Policy Papers, September 8, 2008
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- Fuel and Food Price Subsidies - Issues and Reform Options
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Bibliographic details
- Published: September 8, 2008
- Series: Policy Papers
Summary and key findings
- Government price subsidies are pervasive in developed, emerging, and low-income countries.
- A subsidy is defined as a form of government intervention resulting in a deviation of an actual price facing consumers and producers from a specified benchmark price.
- Subsidies affect consumption and production patterns as well as the distribution of resources, with important implications for the budget, expenditure composition, and long-term growth.
- Subsidies can and often do involve fiscal costs, but not all affect government fiscal accounts in the same way.
- Price subsidies have spillover effects onto prices and quantities in domestic, regional, or global markets.
- The paper discusses key issues and policy options in the reform of subsidies for fossil fuels and selected food commodities, and their implications for the work of the Fund.
Policy options and implications
- Focus of reform: subsidies for fossil fuels and selected food commodities.
- Consideration of fiscal outcomes: some subsidies generate direct fiscal costs, others do not affect fiscal accounts in the same way.
- Broader market effects: reforms should account for spillover effects onto domestic, regional, or global prices and quantities.
- Objectives for reform: adjust consumption and production patterns, reallocate resources, and improve fiscal and long-term growth outcomes.
Metadata and subjects
- Publication date: September 8, 2008
- Format: Chicago
- Subject: Agricultural subsidies, Oil subsidies, Prices, Spillovers
Fuel and Food Price Subsidies - Issues and Reform Options, September 8, 2008.
Content in this bundle
- Fuel and Food Price Subsidies: Issues and Reform Options; September 8, 2008