Energy subsidies and public social spending : theory and evidence /

Energy subsidies and public social spending : theory and evidence /

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Bibliographic Details
Author / Creator:	Ebeke, Christian, author.
Imprint:	[Washington, D.C.] : International Monetary Fund, ©2015.
Description:	1 online resource (30 pages) : color illustrations, color maps.
Language:	English
Series:	IMF working paper ; WP/15/101 IMF working paper ; WP/15/101.
Subject:	Power resources -- Subsidies -- Developing countries -- Econometric models. Energy policy -- Developing countries -- Econometric models. Expenditures, Public -- Econometric models. Social policy -- Economic aspects -- Developing countries -- Econometric models. Education -- Developing countries -- Econometric models. Public health -- Developing countries -- Econometric models. Public goods -- Econometric models. Crowding out (Economics) -- Developing countries -- Econometric models. Crowding out (Economics) -- Econometric models. Education -- Econometric models. Energy policy -- Econometric models. Expenditures, Public -- Econometric models. Public goods -- Econometric models. Public health -- Econometric models. Developing countries. Electronic books.
Format:	E-Resource Book
URL for this record:	http://pi.lib.uchicago.edu/1001/cat/bib/12504452

Hidden Bibliographic Details
Other authors / contributors:	Lonkeng Ngouana, Constant. International Monetary Fund. European Department. International Monetary Fund. Fiscal Affairs Department.
ISBN:	1475580746 9781475580747 9781475580747
ISSN:	1018-5941
Notes:	"May 2015." "European Department and Fiscal Affairs Department." Includes bibliographical references (pages 25-26). Online resource; title from pdf title page (IMF.org Web site, viewed May 11, 2015).
Summary:	This paper shows that high energy subsidies and low public social spending can emerge as an equilibrium outcome of a political game between the elite and the middle-class when the provision of public goods is subject to bottlenecks, reflecting weak domestic institutions. We test this and other predictions of our model using a large cross-section of emerging markets and low-income countries. The main empirical challenge is that subsidies and social spending could be jointly determined (e.g., at the time of the budget), leading to a simultaneity bias in OLS estimates. To address this concern, we adopt an identification strategy whereby subsidies in a given country are instrumented by the level of subsidies in neighboring countries. Our Instrumental Variable (IV) estimations suggest that public expenditures in education and health were on average lower by 0.6 percentage point of GDP in countries where energy subsidies were 1 percentage point of GDP higher. Moreover, we find that the crowding-out was stronger in the presence of weak domestic institutions, narrow fiscal space, and among the net oil importers. --Abstract.
Other form:	Print Version: 9781475580747
Standard no.:	10.5089/9781475580747.001

Description
Summary:	This paper shows that high energy subsidies and low public social spending can emerge as an equilibrium outcome of a political game between the elite and the middle-class when the provision of public goods is subject to bottlenecks, reflecting weak domestic institutions. We test this and other predictions of our model using a large cross-section of emerging markets and low-income countries. The main empirical challenge is that subsidies and social spending could be jointly determined (e.g., at the time of the budget), leading to a simultaneity bias in OLS estimates. To address this concern, we adopt an identification strategy whereby subsidies in a given country are instrumented by the level of subsidies in neighboring countries. Our Instrumental Variable (IV) estimations suggest that public expenditures in education and health were on average lower by 0.6 percentage point of GDP in countries where energy subsidies were 1 percentage point of GDP higher. Moreover, we find that the crowding-out was stronger in the presence of weak domestic institutions, narrow fiscal space, and among the net oil importers.
Item Description:	"May 2015." "European Department and Fiscal Affairs Department."
Physical Description:	1 online resource (30 pages) : color illustrations, color maps.
Bibliography:	Includes bibliographical references (pages 25-26).
ISBN:	1475580746 9781475580747
ISSN:	1018-5941