The Unequal Benefits of Fuel Subsidies Revisited: Evidence for Developing Countries

Author/Editor:

David Coady ; Valentina Flamini ; Louis Sears

Publication Date:

November 25, 2015

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

Understanding who benefits from fuel price subsidies and the welfare impact of increasing fuel prices is key to designing, and gaining public support for, subsidy reform. This paper updates evidence for developing countries on the magnitude of the welfare impact of subsidy reform and its distribution across income groups, incorporating more recent studies and expanding the number of countries. These studies confirm that a very large share of benefits from price subsidies goes to high-income households, further reinforcing existing income inequalities. The results can also help to approximate the welfare impact of subsidy reform for countries where the data necessary for such an analysis is not available.

Series:

Working Paper No. 2015/250

Subject:

Consumption Energy pricing Energy subsidies Expenditure Fuel prices Income Inflation National accounts Prices

English

Publication Date:

November 25, 2015

ISBN/ISSN:

9781513501390/1018-5941

Stock No:

WPIEA2015250

Pages:

25

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