Amyra Asamoah, Emine Hanedar, Baoping Shang, 12 June 2017

Despite a growing consensus in favour of reform of costly and environmentally damaging energy price subsidies, many countries remain resistant. This column takes stock of recent developments using an updated energy price database. Environmental concerns seem to be playing a larger role in driving reform, but most reforming countries are found to have been facing large fiscal imbalances. These countries may need additional, deeper measures for the reforms to last.

David Coady, Baoping Shang, 13 January 2015

The adverse effects of energy subsidies have been widely documented. While recent decreases in international oil prices have provided a welcome respite, past experience has highlighted the need for caution. This column argues that to make this respite a permanent gain will require the removal of government discretion in determining domestic energy prices. Adoption of an automatic energy pricing mechanism, possibly with in-built short-term price smoothing, can help prevent the return of subsidies and prepare the way for eventual price deregulation.

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