Water, Electricity, and the Poor: Who Benefits from Utility Subsidies?

While consumer utility subsidies are widespread in both the water and electricity sectors, their effectiveness in reaching and distributing resources to the poor is the subject of much debate. This publication brings together empirical evidence on subsidy performance across a wide range of countries. It documents the prevalence of consumer subsidies, provides a typology of the many variants found in the developing world, and presents a number of indicators useful in assessing the degree to which such subsidies benefit the poor, focusing on three key concepts: beneficiary incidence, benefit incidence, and materiality. The findings on subsidy performance will be useful to policy makers, utility regulators, and sector practitioners who are contemplating introducing, eliminating, or modifying utility subsidies, and to those who view consumer utility subsidies as a social protection instrument.

[1]  C. Kirubi,et al.  Energy for Sustainable Development , 2006 .

[2]  A. Sen,et al.  The Political Economy of Targeting , 2006 .

[3]  Mukami Kariuki,et al.  Small-Scale Private Service Providers of Water Supply and Electricity: A Review of Incidence, Structure, Pricing, and Operating Characteristics , 2005 .

[4]  E. Auriol,et al.  The Marginal Cost of Public Funds in Africa , 2005 .

[5]  Kerry Krutilla,et al.  The Urban Household Energy Transition: Social and Environmental Impacts in the Developing World , 2005 .

[6]  J. Strand,et al.  Water markets and demand in Central American cities , 2005, Environment and Development Economics.

[7]  E. Auriol,et al.  Taxation Base in Developing Countries , 2005 .

[8]  Sebastian Galiani,et al.  Water for Life: The Impact of the Privatization of Water Services on Child Mortality , 2004, Journal of Political Economy.

[9]  V. Foster,et al.  Does Infrastructure Reform Work for the Poor? A Case Study from Guatemala , 2004 .

[10]  Arthur C. McIntosh,et al.  Asian Water Supplies: Reaching the Urban Poor , 2004 .

[11]  L. Serven,et al.  The Effects of Infrastructure Development on Growth and Income Distribution , 2004 .

[12]  J. Lampietti.  Power's promise: electricity reforms in Eastern Europe and Central Asia , 2004 .

[13]  J. Hoddinott,et al.  The Targeting of Transfers in Developing Countries: Review of Experience and Lessons , 2004 .

[14]  J. Lampietti,et al.  Revisiting reform in the energy sector : lessons from Georgia , 2003 .

[15]  J. Mwansa,et al.  Escherichia coli enterovirulent phenotypes in Zambians with AIDS-related diarrhoea. , 2003, Transactions of the Royal Society of Tropical Medicine and Hygiene.

[16]  C. Price,et al.  Utility Privatization and Regulation: A Fair Deal for Consumers? , 2003 .

[17]  Caryn Bern,et al.  The global burden of diarrhoeal disease, as estimated from studies published between 1992 and 2000. , 2003, Bulletin of the World Health Organization.

[18]  S. Cairncross,et al.  Health, Environment and the Burden of Disease; a Guidance Note , 2003 .

[19]  Q. Wodon,et al.  Lifeline or Means-Testing? Electric Utility Subsidies in Honduras , 2003 .

[20]  J. Bartram,et al.  Domestic Water Quantity, Service Level and Health , 2003 .

[21]  Christian A. Ruzzier,et al.  The Case for International Coordination of Electricity Regulation: Evidence from the Measurement of Efficiency in South America , 2002 .

[22]  Antonio Estache,et al.  Sector Organization, Governance, and the Inefficiency of African Water Utilities , 2002 .

[23]  Q. Wodon,et al.  Marginal benefit incidence analysis using a single cross-section of data , 2002 .

[24]  Q. Wodon,et al.  Consumption Dominance Curves: Testing for the Impact of Indirect Tax Reforms on Poverty , 2002 .

[25]  Kevin James,et al.  Watergy: taking advantage of untapped energy and water efficiency opportunities in municipal water systems , 2002 .

[26]  Q. Wodon,et al.  The Targeting of Government Programs in Chile: A Quantitative and Qualitative Assessment , 2002 .

[27]  A. Gómez‐Lobo.  Incentive-based subsidies : designing output-based subsidies for water consumption , 2001 .

[28]  Clarissa Brocklehurst.  Durban metro water - private sector partnerships to serve the poor , 2001 .

[29]  Sumila Gulyani,et al.  Utility Pricing and the Poor: Lessons from Armenia , 2001 .

[30]  Dale Whittington,et al.  Infrastructure Coverage and the Poor: A Global Perspective , 2001 .

[31]  V. Foster,et al.  Accounting for Poverty in Infrastructure Reform: Learning from Latin America's Experience. WBI Development Studies. , 2001 .

[32]  Nirvikar Singh,et al.  Welfare Policy: Cash versus Kind, Self-Selection and Notches , 2000 .

[33]  E. Martinot,et al.  to Remote Areas : Off-Grid Rural Electrification in Developing Countries , 2000 .

[34]  J. Halpern,et al.  Information and Modeling Issues in Designing Water and Sanitation Subsidy Schemes , 1999 .

[35]  Simon Cowan,et al.  Reforming Urban Water Systems in Developing Countries , 1999 .

[36]  T. Solo.  Small-scale entrepreneurs in the urban water and sanitation market , 1999 .

[37]  J. Garrett,et al.  Can cash transfer programs work in resource-poor countries? , 1999 .

[38]  N. Smith.  Low-Cost Electrification: Affordable Electricity Installation for Low-income Households in Developing Countries , 1998 .

[39]  Cesar E. Yñiguez,et al.  Second Water Utilities Data Book: Asian and Pacific Region , 1997 .

[40]  S. Carvalho,et al.  Safety Net Programs and Poverty Reduction: Lessons from Cross-Country Experience , 1997 .

[41]  D Dun,et al.  Coping with intermittent water supply: problems and prospects. , 1996 .

[42]  Peter F. B. Nayenga.  Uganda, a country study , 1995, African Studies Review.

[43]  Dale Whittington,et al.  Possible Adverse Effects of Increasing Block Water Tariffs in Developing Countries , 1992, Economic Development and Cultural Change.

[44]  J. Potash,et al.  Effects of improved water supply and sanitation on ascariasis, diarrhoea, dracunculiasis, hookworm infection, schistosomiasis, and trachoma. , 1991, Bulletin of the World Health Organization.

[45]  G. Foley,et al.  Electricity for rural people. , 1990 .

[46]  Charles L. Ballard,et al.  General Equilibrium Computations of the Marginal Welfare Costs of Taxes in the United States , 1985 .

[47]  Gerald R. Faulhaber,et al.  Subsidy-Free Prices and Anonymous Equity [Cross-Subsidization: Pricing in Public Enterprises] , 1981 .

[48]  L. Thurow.  Cash Versus In-Kind Transfers , 1974 .

[49]  M. Boiteux,et al.  On the management of public monopolies subject to budgetary constraints , 1971 .

[50]  David G. Davies,et al.  The Theory of Public Finance , 1960 .

[51]  Ronald H. Coase,et al.  The Marginal Cost Controversy , 1946 .

[52]  F. Ramsey.  A Contribution to the Theory of Taxation , 1927 .