The Unequal Benefits of Fuel Subsidies: A Review of Evidence for Developing Countries

Granado, F. Javier Arze del; Coady, David; Gillingham, Robert

doi:10.1016/j.worlddev.2012.05.005

Cited by 334 publications

(153 citation statements)

References 5 publications

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“…in developing countries. 64 Thus, subsidies cannot be considered an adequate measure to mitigate negative distributional effects of exogenously rising transportation fuel prices. …”

Section: Detailed Results For Developing Countriesmentioning

confidence: 99%

“…Subsidies for transportation fuels are shown to be of little use for the mitigation of distributional effects in developing countries. 64 Subsidies play a relatively prominent role in developing countries and economies in transition. There clearly is a lack of knowledge about the distributional effects of transportation fuel subsidies in general.…”

Section: The Case Of Emerging Economies and Developing Countriesmentioning

confidence: 99%

See 1 more Smart Citation

Social Implications of Green Growth Policies from the Perspective of Energy Sector Reform and its Impact on Households

Heindl,

LLschel

2015

SSRN Journal

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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. Social Implications of Green Growth Policies from the Perspective of Energy Sector Reform and its Impact on Households Andreas Löschel University of Münster February 2015 This paper is also available as: OECD Issue Note -Social Implications of Green Growth Policies from the Perspective of Energy Sector Reform and its Impact on Households-AbstractThis paper reviews the literature on distributional effects of energy and carbon taxation with focus on microsimulation models. Most studies find that direct energy and carbon taxation tends to be regressive. Regressive effects occur mostly with respect to taxation of electricity or space heating. Taxation of transportation fuels show less regressive, neutral, or even progressive effects. Adequate revenue recycling often allows for neutralisation or full elimination of regressive effects so that energy and carbon tax reforms can be progressive. Some studies find evidence for the existence of a double dividend. There seems to be an efficiency-equity trade-off in revenue recycling, i.e. whether to foster growth or to assist low-income households. While a large number of studies on advanced economies are available, there clearly is a gap with regard to evidence for developing countries. Another gap relates to the lack of documentation on the challenges of incorporating macroeconomic models and long-term modelling perspectives in microsimulation. Both aspects can be of great importance with respect to the design of green growth policies. Thoughtful incorporation of social considerations, including aspects of poverty in modelling approaches could enhance the existing instruments of exante policy assessments since poverty is a tangible concept which is well-known, understandable, and openly observable for citizens and policy makers.

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“…in developing countries. 64 Thus, subsidies cannot be considered an adequate measure to mitigate negative distributional effects of exogenously rising transportation fuel prices. …”

Section: Detailed Results For Developing Countriesmentioning

confidence: 99%

Section: The Case Of Emerging Economies and Developing Countriesmentioning

confidence: 99%

Social Implications of Green Growth Policies from the Perspective of Energy Sector Reform and its Impact on Households

Heindl,

LLschel

2015

SSRN Journal

View full text Add to dashboard Cite

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“…The International Energy Agency estimated that in 2014, fossil-fuel subsidies totaled $500 billion (International Energy Agency, 2015). Although the subsidies intended to support poorer income groups, most of the benefits of subsidies are captured by high-income groups (Arze del Granado et al, 2010) and lead to excessive consumption that increases global carbon dioxide emissions and contribute to global warming (Bauer et al, 2013). There is now wide recognition that fossil-fuel subsidies represent a large opportunity cost and could be allocated to more productive sectors such as health or education.…”

Section: Other Factors Affecting Tax Revenuementioning

confidence: 99%

Fiscal space for domestic funding of health and other social services

Meheus

McIntyre

2017

HEPL

109

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To progress toward universal health coverage and promote inclusive social and economic development, it will be necessary to strengthen domestic resource mobilization for health. In this paper, we examine options for increasing domestic government revenue in low-and middle-income countries. We analyze the relationship between level of economic development and levels of government revenue and expenditure, and show that a country's level of economic development does not predetermine its spending levels. Government revenue can be increased through improved tax compliance and efficiency in revenue collection, maximizing revenue from mineral and other natural resources, and increasing tax rates where appropriate. The emphasis should be on increasing revenue through the most progressive means possible; the purpose of raising government spending on health would be defeated if that spending were funded by increasing the relative tax burden of those who are meant to benefit. Increasing government revenue through taxation or other sources is first and foremost a fiscal policy choice or political decision and should be supported through concerted global action.

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“…More broadly, only around 7 per cent of fuel subsidies in lowand middle-income countries reach the poorest 20 per cent of people, while 43 per cent flow to the richest fifth (Arze del Granado et al 2012). The true poor do not drive gas guzzlers; the relatively rich are the largest users of private road vehicles in developing countries, particularly four-wheeled vehicles (Kutzbach 2009).…”

Section: Reducing Povertymentioning

confidence: 99%