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

Author

Listed:
  • Mr. David Coady
  • Valentina Flamini
  • Louis Sears

Abstract

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.

Suggested Citation

  • Mr. David Coady & Valentina Flamini & Louis Sears, 2015. "The Unequal Benefits of Fuel Subsidies Revisited: Evidence for Developing Countries," IMF Working Papers 2015/250, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2015/250
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    References listed on IDEAS

    as
    1. Arze del Granado, Francisco Javier & Coady, David & Gillingham, Robert, 2012. "The Unequal Benefits of Fuel Subsidies: A Review of Evidence for Developing Countries," World Development, Elsevier, vol. 40(11), pages 2234-2248.
    2. Norbert Schady & Ariel Fiszbein & Francisco H.G. Ferreira & Niall Keleher & Margaret Grosh & Pedro Olinto & Emmanuel Skoufias, 2009. "Conditional Cash Transfers : Reducing Present and Future Poverty," World Bank Publications - Books, The World Bank Group, number 2597.
    3. Emil Tesliuc & Margaret Grosh & Azedine Ouerghi & Carlo del Ninno, 2008. "For Protection and Promotion : The Design and Implementation of Effective Safety Nets," World Bank Publications - Books, The World Bank Group, number 6582.
    4. Victoria Monchuk, 2014. "Reducing Poverty and Investing in People : The New Role of Safety Nets in Africa [Réduire la pauvreté et investir dans le capital humain : Le nouveau rôle des filets sociaux en Afrique - études de ," World Bank Publications - Books, The World Bank Group, number 16256.
    5. Marito Garcia & Charity M. T. Moore, 2012. "The Cash Dividend : The Rise of Cash Transfer Programs in Sub-Saharan Africa," World Bank Publications - Books, The World Bank Group, number 2246.
    6. Mr. David Coady & Mr. Javier Arze del Granado, 2010. "The Unequal Benefits of Fuel Subsidies: A Review of Evidence for Developing Countries," IMF Working Papers 2010/202, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

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