Description

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.

More publications in this series: Working Papers

More publications by: David Coady ; Valentina Flamini ; Louis Sears