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Political Economy of Power Sector Subsidies : A Review with Reference to Sub-Saharan Africa

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World Bank (WB)

Abstract: Power sector subsidies in Sub-Saharan Africa are substantial and highly regressive. While subsidies can be quick, easy, and politically expedient to implement, they are equally quick to take root and challenging to remove. Optimal policies that are technically sound and welfare-enhancing over the long run have nevertheless been found difficult to launch and even more challenging to sustain. Of the barriers to reform, those associated with political economy are among the most powerful, yet their analysis is often lacking due consideration in the reform design process. This paper reviews the literature on power subsidies and their reform with emphasis on the political economy of such reform. It examines pricing principles in the power sector and different types of subsides; drivers for subsidies, benefits and costs of subsidy reform, and their distribution; and approaches to political economy analysis, tools available, and methodological issues. The paper draws examples from Sub-Saharan Africa and elsewhere, and presents case studies from the literature.
Type: Publications & Research :: Working Paper
Publications & Research
Link: http://hdl.handle.net/10986/19986
Subject: ACCESS TO ELECTRICITY
ACCESS TO SERVICES
ADMINISTRATIVE CAPACITY
ADMINISTRATIVE COSTS
ADVERSE EFFECT
ADVERSE EFFECTS
AFFORDABILITY
AGRICULTURAL PRODUCTS
AGRICULTURAL SECTOR
AGRICULTURE
ALTERNATIVE METHODS
APPROACH
ARREARS
AVAILABILITY
AVERAGE COSTS
BACKUP POWER
BALANCE
BANKS
BUDGETARY SUPPORT
BUSINESS DEVELOPMENT
BUSINESS OWNERS
CAPITAL ACCUMULATION
CAPITAL COSTS
CAPITAL REQUIREMENTS
CASH PAYMENT
CASH PAYMENTS
CIVIL LIBERTIES
CLEAN WATER
COAL
COLLUSION
COMPETITIVE MARKET
COMPETITIVENESS
CONNECTIVITY
CONSUMER PRICE INDEX
CONSUMERS
CONSUMPTION INCREASES
CONTINGENT LIABILITIES
CORE BUSINESS
CORRUPTION
COST OF SUBSIDY
COST REDUCTION
COSTS OF SUBSIDY
CREDIT RATING
CRITICAL MASS
CROSS-SUBSIDIES
CURRENCY
DEBT
DEBT OBLIGATIONS
DEBTS
DECISION MAKING
DEMAND FOR ELECTRICITY
DEMOCRACY
DEVELOPING COUNTRIES
DIESEL
DIESEL FUEL
DISTRIBUTION LOSSES
DISTRIBUTION NETWORK
DISTRIBUTION OF COSTS
DOMESTIC GAS
EARNINGS
ECONOMETRIC ANALYSIS
ECONOMIC ACTIVITY
ECONOMIC EFFICIENCY
ECONOMIC GROWTH
ECONOMIC POLICY
ECONOMIC REFORM
ECONOMIC REFORMS
ECONOMIC STRUCTURE
ECONOMIES OF SCALE
EDUCATIONAL BACKGROUND
EFFICIENCY IMPROVEMENT
ELASTICITY
ELECTRIC UTILITIES
ELECTRICITY
ELECTRICITY CONSUMPTION
ELECTRICITY GENERATION
ELECTRICITY PRICES
ELECTRICITY SUPPLY
ELECTRICITY TARIFFS
ELECTRIFICATION
EMPLOYEE
EMPLOYERS
ENERGY MIX
EXCHANGE RATE
EXCLUSION
EXPENDITURE
EXTERNAL SHOCKS
FACTORS OF PRODUCTION
FARMERS
FINANCES
FINANCIAL COST
FINANCIAL CRISES
FINANCIAL CRISIS
FINANCIAL HEALTH
FINANCIAL SUSTAINABILITY
FISCAL DEFICITS
FIXED COSTS
FOOD PRICES
FOREIGN BANKS
FORMS OF COMPENSATION
FUEL
FUEL OIL
FUEL PRICES
FUELS
GDP
GOOD GOVERNANCE
GOVERNMENT BUDGET
GOVERNMENT DEBT
GOVERNMENT EXPENDITURES
GOVERNMENT OWNERSHIP
GOVERNMENT POLICIES
GROSS DOMESTIC PRODUCT
HOUSEHOLD ACCESS
HOUSEHOLD INCOME
HOUSEHOLDS
HUMAN CAPITAL
HYDROPOWER
INCOME
INCOME GROUPS
INCOME LEVELS
INCREASING RETURNS
INCREASING RETURNS TO SCALE
INEFFICIENCY
INEQUALITY
INFLATION
INPUT PRICES
INSTITUTIONAL ECONOMICS
INSTITUTIONAL REFORMS
INSURANCE
INTEREST PAYMENTS
INTEREST RATES
INVENTORY
JOB CREATION
KILOWATT-HOUR
LEGITIMACY
LOAN
LOAN GUARANTEES
LOW TARIFFS
MARGINAL COST
MARGINAL COST PRICING
MARGINAL COSTS
MARKET ENTRY
MARKET PRICES
MARKET STRUCTURE
MIDDLE-INCOME COUNTRIES
MISMANAGEMENT
NATURAL GAS
NATURAL MONOPOLIES
NEW BUSINESS
OIL
OIL EXPORTERS
OIL PRICES
OIL PRODUCTS
OPERATING COSTS
OPTIMIZATION
OUTPUT
PAYMENT SYSTEM
PEAK DEMAND
PENSIONS
PERFECT INFORMATION
PIPELINE
POLICY DESIGN
POLITICAL ECONOMY
POLITICAL POWER
POLITICAL RISK
POLITICAL SCIENCE
POLITICAL SYSTEM
POWER
POWER CONSUMPTION
POWER COSTS
POWER GENERATION
POWER GENERATION CAPACITY
POWER MIX
POWER OUTAGES
POWER PRICES
POWER SECTOR
POWER SECTORS
POWER SHORTAGES
POWER SYSTEM
PRICE ELASTICITY
PRICE INCREASES
PRICE SUBSIDIES
PRICE SUBSIDY
PRIVATE INVESTMENT
PRIVATE INVESTORS
PRIVATE SECTOR
PRIVATIZATION
PUBLIC UTILITIES
QUANTITY OF ELECTRICITY
RATE OF RETURN
REFORM PROGRAM
REFORM PROGRAMS
REGRESSIVE SUBSIDY
REGULATOR
REGULATORY AUTHORITY
RENEWABLE ENERGY
REPUBLIC
REPUTATION
RESIDENTIAL CONSUMERS
RESIDENTIAL DEMAND
SAFETY NET
SAFETY NETS
SAVINGS
SMALL BUSINESSES
SMALL FARMERS
SOCIAL PROTECTION
SOCIAL SAFETY NETS
SOCIAL WELFARE
STATE INTERVENTION
SUBSIDIZATION
SUPPLY CHAIN
TARIFF LEVELS
TARIFF STRUCTURE
TARIFF STRUCTURES
TAX
TAX CREDITS
THERMAL POWER
TRACK RECORD
TRADE ASSOCIATIONS
TRADE LIBERALIZATION
TRADE UNIONS
TRADE-OFF
TRANSACTION COSTS
TRANSFER OF OWNERSHIP
TRANSMISSION LINES
UNEMPLOYMENT
UNIVERSAL ACCESS
VILLAGE
VOLTAGE
VOUCHERS
WEALTH




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