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FOSSIL FUEL SUBSIDIES, INCOME INEQUALITY, AND POVERTY: EVIDENCE FROM DEVELOPING COUNTRIES
Author(s) -
Couharde Cecile,
Mouhoud Sara
Publication year - 2020
Publication title -
journal of economic surveys
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.657
H-Index - 92
eISSN - 1467-6419
pISSN - 0950-0804
DOI - 10.1111/joes.12384
Subject(s) - subsidy , poverty , economics , developing country , development economics , economic inequality , inequality , income distribution , fossil fuel , empirical evidence , natural resource economics , public economics , economic growth , biology , market economy , ecology , mathematical analysis , philosophy , epistemology , mathematics
Abstract The past two decades have witnessed widespread attempts to reform fossil fuel subsidies in developing countries. If the reforms are likely to improve economic efficiency, the expected effects on income distribution and poverty are more controversial. This paper reviews the recent literature that examines the impacts of fossil fuel subsidies and their reforms on income inequality and poverty in developing countries. It identifies the different channels that have been explored in the literature and surveys the empirical evidence on the importance of these channels in practice. Drawing on diverse country experiences, it also discusses why fossil fuel subsidies are particularly challenging to reform and highlights several ways in which efforts to reform may be feasible and successful.