When, How, and Why Do Oil Rich Countries Reduce Fossil Fuel Subsidies?

• In Event: Pushing the Boundaries of the Resource Curse: New Directions in Oil and Politics

Abstract

Oil-exporting countries struggle with chronically high energy subsidies. Despite anecdotical evidence of recent attempts to reduce subsidies, we still lack a comprehensive understanding of the dynamics of fossil fuel subsidy reforms (FFSR). Earlier studies have documented the prevalence of FFSRs but finds that they tend to fail at a remarkably high rate. This paper builds on those observations and focuses on the 21 oil exporting countries that have consistently subsidized their gasoline prices over the last 30 years. It provides an analysis that is a) updated to 2022, b) robust to alternative ways of defining “reform” incidents, c) includes a detailed description of 210 distinct episodes of reform between 1990 and 2022, and d) explains the incidence, duration, and long-term effects of these reforms.

Authors

• Paasha Mahdavi, University of California, Santa Barbara

• Michael L. Ross, University of California, Los Angeles

• Evelyn Simoni, UCLA