From Universal Price Subsidies to Modern Social Assistance : The Political Economy of Reform

The efficiency and effectiveness of generalized subsidies as part of a safety net system are questionable. This is because generalized subsidies tend to create distortions in the food and fuel markets and are likely to be regressive and to suffer from significant leakage of benefits to the non-poor, diluting their impact on poverty reduction. They also often have higher administrative costs than cash transfers. The policy response to recent crises highlighted an emerging interest for a transition from food and fuel subsidies toward greater reliance on targeted cash transfer programs in several countries. The transition from a strong reliance on generalized subsidies to more modern and administratively more sophisticated social protection has been witnessed in much of the developing world as countries move from lower to middle income status. However, cutting back subsidies has social as well as political implications, and therefore needs to be managed and implemented appropriately. This paper seeks to examine the implications and aspects of subsidies reform, in particular the socio-political risk of cutting subsidies in the context of modernizing social assistance.

Bibliographic Details

Main Author:	World Bank
Format:	General Economy, Macroeconomics and Growth Study biblioteca
Language:	English en_US
Published:	Washington, DC 2013
Subjects:	ACCESS TO SERVICES, ACCESSIBILITY, ADMINISTRATIVE COSTS, ASSISTANCE PROGRAMS, BENCHMARK, BENEFICIARIES, BENEFICIARY, BUFFER STOCKS, BUSES, CAR, CAR-OWNING HOUSEHOLDS, CARS, CASH AID, CASH ASSISTANCE, CASH BENEFIT, CASH TRANSFER, CASH TRANSFER PROGRAMS, CASH TRANSFERS, CIVIL WAR, CLIMATE CHANGE, COMMODITY, COMMUNITY INVOLVEMENT, CONSUMER SUBSIDIES, CONSUMER SUBSIDY, CONSUMERS, CONSUMPTION LEVELS, COPING STRATEGIES, DEMOCRACY, DEVALUATIONS, DEVELOPING COUNTRIES, DEVELOPMENT POLICIES, DIESEL, DIVIDEND, DRIVERS, ECONOMIC CRISES, ECONOMIC GROWTH, ECONOMIES OF SCALE, EMISSIONS, ENERGY SUBSIDIES, ENERGY SUBSIDY, ENVIRONMENTAL ISSUES, EXCLUSION, EXPORTS, EXPOSURE, EXTERNALITIES, FARES, FINANCIAL CRISES, FINANCIAL CRISIS, FINANCIAL STABILITY, FISCAL CRISIS, FISCAL RISK, FOOD COMMODITIES, FOOD CONSUMPTION, FOOD DISTRIBUTION, FOOD PRICE, FOOD PRICE SUBSIDIES, FOOD PRICES, FOOD SUBSIDIES, FOOD SUBSIDY, FOSSIL FUEL, FOSSIL FUELS, FUEL, FUEL CONSUMPTION, FUEL PRICE, FUEL PRICE INCREASE, FUEL PRICE INCREASES, FUEL PRICES, FUEL SUBSIDIES, GASOLINE, GDP, GOVERNANCE INDICATORS, GOVERNMENT BUDGET, GOVERNMENT CAPACITY, GOVERNMENT FUNDS, HEALTH CARDS, HEALTH INSURANCE, HOUSEHOLD SURVEYS, HUMAN CAPITAL, HUMAN DEVELOPMENT, IMPORT QUOTAS, INCOME, INCOME INEQUALITY, INCOME LEVELS, INCOMES, INEFFICIENCY, INEQUALITY, INFORMATION ASYMMETRY, INFRASTRUCTURE INVESTMENT, INSTITUTIONAL CAPACITY, INTEREST RATES, INTERNATIONAL LABOUR ORGANIZATION, KEROSENE SUBSIDY, LEAKAGE OF BENEFITS, LOW INTEREST RATES, MARKET FAILURES, MARKET PRICE, MARKET PRICES, MINIMUM INCOME, MOBILITY, NATURAL RESOURCE, NATURAL RESOURCES, OPPORTUNITY COST, PATRONAGE, PENSIONS, POLICE, POLITICAL ECONOMY, POLITICAL ECONOMY OF REFORM, POLITICAL RISK, POLITICAL RISKS, POLITICAL STABILITY, POLITICAL SUPPORT, POLITICAL SYSTEM, POLITICAL SYSTEMS, POOR, POVERTY ALLEVIATION, POVERTY LEVELS, POVERTY REDUCTION, PRICE FLUCTUATIONS, PRICE LEVELS, PRICE OF DIESEL, PRICE OF FUEL, PRICE SETTING, PRICE STABILIZATION, PRICE SUBSIDIES, PRICE SUBSIDY, PROTECTION MECHANISM, PROTECTION MECHANISMS, PUBLIC ATTITUDES, PUBLIC PERCEPTION, PUBLIC PERCEPTIONS, PUBLIC POLICY, PUBLIC RELATIONS, PUBLIC RESOURCES, PUBLIC SERVICES, PUBLIC SPENDING, PUBLIC SUPPORT, REDISTRIBUTIVE POLICIES, REFORM PROCESS, REGULATORY BODY, RICE SUBSIDY, RISK REDUCTION, RURAL INFRASTRUCTURE, SAFETY, SAFETY NET, SAFETY NET PROGRAMS, SAVINGS, SHOCK, SMALL BUSINESS, SMALL ENTREPRENEUR, SOCIAL ASSISTANCE, SOCIAL CAPITAL, SOCIAL CONTRACT, SOCIAL COST, SOCIAL INVESTMENT, SOCIAL POLICIES, SOCIAL PROGRAMS, SOCIAL PROTECTION, SOCIAL SAFETY NET, SOCIAL SAFETY NETS, SOCIAL SECURITY, SOCIAL SERVICES, SOCIAL SPENDING, SOCIAL WELFARE, SSN, STREETS, SUBSIDIZING, SUPPORT PROGRAM, SUSTAINABLE DEVELOPMENT, TARGETED SUBSIDIES, TARGETED TRANSFERS, TARGETING, TAX, TAX REFORM, TAXI DRIVERS, TRADE UNIONS, TRANSPARENCY, TRANSPORT, TRANSPORTATION, TRAVEL COSTS, TRIP, TRIPS, TRUE, UNIVERSAL HEALTH, UNIVERSAL SUBSIDIES, VULNERABLE HOUSEHOLDS, WAGES, WAR, WEALTH, WELFARE POLICY, WELFARE SYSTEM,
Online Access:	http://documents.worldbank.org/curated/en/2012/12/18699556/universal-price-subsidies-modern-social-assistance-political-economy-reform http://hdl.handle.net/10986/16723
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