Water, Electricity, and the Poor: Who Benefits from Utility Subsidies?
World Bank, Jan 1, 2005 - Business & Economics - 283 pages
This book reviews the prevalence and variants of consumer subsidies found in the developing world and the effectiveness of these subsidies for the poor. It places consumer subsidies in a broader social protection framework and compares them with poverty-focused programmes in other sectors using a common metric. It concludes that the most common subsidy instruments perform poorly in comparison with most other transfer mechanisms. Alternative consumption and connection subsidy mechanisms show more promise, especially when combined with complementary non-price approaches to making utility services accessible and affordable to poor households. The many factors contributing to those outcomes are dissected, identifying those that can be controlled and used to improve performance.
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A Typology of Consumer Utility Subsidies
The Rationale for Subsidizing Services for the Poor
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Argentina Bangalore beneficiary incidence benefit incidence benefit targeting performance bills bO bO burden limit Cape Verde Colombia connection subsidies consumer utility subsidies consumption subsidies cost recovery countries coverage cubic meters effect electricity services electricity subsidies errors of exclusion expenditure fixed charges geographic targeting Guatemala households receiving improve increasing block tariff Kathmandu kilowatt-hours Lorenz curve means testing nonpoor households Paraguay percent of households poor and nonpoor poor households poorest potential poverty poverty line ppp ppppp quantity ratio quantity targeting quantity-targeted subsidies quintile receive the subsidy reduce residential customers rH CM Rwanda sidy simulated subsidy benefits subsidy design factors subsidy performance subsidy rate ratio subsidy recipients targeted subsidies targeting performance indicator targeting ratio tariff structures tricity unconnected households uptake ratio urban utility services water and electricity water or electricity water subsidies water supply water utilities