Kojima, MasamiBacon, RobertTrimble, Chris2014-09-082014-09-082014-07https://hdl.handle.net/10986/19986Power sector subsidies in Sub-Saharan Africa are substantial and highly regressive. While subsidies can be quick, easy, and politically expedient to implement, they are equally quick to take root and challenging to remove. Optimal policies that are technically sound and welfare-enhancing over the long run have nevertheless been found difficult to launch and even more challenging to sustain. Of the barriers to reform, those associated with political economy are among the most powerful, yet their analysis is often lacking due consideration in the reform design process. This paper reviews the literature on power subsidies and their reform with emphasis on the political economy of such reform. It examines pricing principles in the power sector and different types of subsides; drivers for subsidies, benefits and costs of subsidy reform, and their distribution; and approaches to political economy analysis, tools available, and methodological issues. The paper draws examples from Sub-Saharan Africa and elsewhere, and presents case studies from the literature.en-USCC BY 3.0 IGOACCESS TO ELECTRICITYACCESS TO SERVICESADMINISTRATIVE CAPACITYADMINISTRATIVE COSTSADVERSE EFFECTADVERSE EFFECTSAFFORDABILITYAGRICULTURAL PRODUCTSAGRICULTURAL SECTORAGRICULTUREALTERNATIVE METHODSAPPROACHARREARSAVAILABILITYAVERAGE COSTSBACKUP POWERBALANCEBANKSBUDGETARY SUPPORTBUSINESS DEVELOPMENTBUSINESS OWNERSCAPITAL ACCUMULATIONCAPITAL COSTSCAPITAL REQUIREMENTSCASH PAYMENTCASH PAYMENTSCIVIL LIBERTIESCLEAN WATERCOALCOLLUSIONCOMPETITIVE MARKETCOMPETITIVENESSCONNECTIVITYCONSUMER PRICE INDEXCONSUMERSCONSUMPTION INCREASESCONTINGENT LIABILITIESCORE BUSINESSCORRUPTIONCOST OF SUBSIDYCOST REDUCTIONCOSTS OF SUBSIDYCREDIT RATINGCRITICAL MASSCROSS-SUBSIDIESCURRENCYDEBTDEBT OBLIGATIONSDEBTSDECISION MAKINGDEMAND FOR ELECTRICITYDEMOCRACYDEVELOPING COUNTRIESDIESELDIESEL FUELDISTRIBUTION LOSSESDISTRIBUTION NETWORKDISTRIBUTION OF COSTSDOMESTIC GASEARNINGSECONOMETRIC ANALYSISECONOMIC ACTIVITYECONOMIC EFFICIENCYECONOMIC GROWTHECONOMIC POLICYECONOMIC REFORMECONOMIC REFORMSECONOMIC STRUCTUREECONOMIES OF SCALEEDUCATIONAL BACKGROUNDEFFICIENCY IMPROVEMENTELASTICITYELECTRIC UTILITIESELECTRICITYELECTRICITY CONSUMPTIONELECTRICITY GENERATIONELECTRICITY PRICESELECTRICITY SUPPLYELECTRICITY TARIFFSELECTRIFICATIONEMPLOYEEEMPLOYERSENERGY MIXEXCHANGE RATEEXCLUSIONEXPENDITUREEXTERNAL SHOCKSFACTORS OF PRODUCTIONFARMERSFINANCESFINANCIAL COSTFINANCIAL CRISESFINANCIAL CRISISFINANCIAL HEALTHFINANCIAL SUSTAINABILITYFISCAL DEFICITSFIXED COSTSFOOD PRICESFOREIGN BANKSFORMS OF COMPENSATIONFUELFUEL OILFUEL PRICESFUELSGDPGOOD GOVERNANCEGOVERNMENT BUDGETGOVERNMENT DEBTGOVERNMENT EXPENDITURESGOVERNMENT OWNERSHIPGOVERNMENT POLICIESGROSS DOMESTIC PRODUCTHOUSEHOLD ACCESSHOUSEHOLD INCOMEHOUSEHOLDSHUMAN CAPITALHYDROPOWERINCOMEINCOME GROUPSINCOME LEVELSINCREASING RETURNSINCREASING RETURNS TO SCALEINEFFICIENCYINEQUALITYINFLATIONINPUT PRICESINSTITUTIONAL ECONOMICSINSTITUTIONAL REFORMSINSURANCEINTEREST PAYMENTSINTEREST RATESINVENTORYJOB CREATIONKILOWATT-HOURLEGITIMACYLOANLOAN GUARANTEESLOW TARIFFSMARGINAL COSTMARGINAL COST PRICINGMARGINAL COSTSMARKET ENTRYMARKET PRICESMARKET STRUCTUREMIDDLE-INCOME COUNTRIESMISMANAGEMENTNATURAL GASNATURAL MONOPOLIESNEW BUSINESSOILOIL EXPORTERSOIL PRICESOIL PRODUCTSOPERATING COSTSOPTIMIZATIONOUTPUTPAYMENT SYSTEMPEAK DEMANDPENSIONSPERFECT INFORMATIONPIPELINEPOLICY DESIGNPOLITICAL ECONOMYPOLITICAL POWERPOLITICAL RISKPOLITICAL SCIENCEPOLITICAL SYSTEMPOWERPOWER CONSUMPTIONPOWER COSTSPOWER GENERATIONPOWER GENERATION CAPACITYPOWER MIXPOWER OUTAGESPOWER PRICESPOWER SECTORPOWER SECTORSPOWER SHORTAGESPOWER SYSTEMPRICE ELASTICITYPRICE INCREASESPRICE SUBSIDIESPRICE SUBSIDYPRIVATE INVESTMENTPRIVATE INVESTORSPRIVATE SECTORPRIVATIZATIONPUBLIC UTILITIESQUANTITY OF ELECTRICITYRATE OF RETURNREFORM PROGRAMREFORM PROGRAMSREGRESSIVE SUBSIDYREGULATORREGULATORY AUTHORITYRENEWABLE ENERGYREPUBLICREPUTATIONRESIDENTIAL CONSUMERSRESIDENTIAL DEMANDSAFETY NETSAFETY NETSSAVINGSSMALL BUSINESSESSMALL FARMERSSOCIAL PROTECTIONSOCIAL SAFETY NETSSOCIAL WELFARESTATE INTERVENTIONSUBSIDIZATIONSUPPLY CHAINTARIFF LEVELSTARIFF STRUCTURETARIFF STRUCTURESTAXTAX CREDITSTHERMAL POWERTRACK RECORDTRADE ASSOCIATIONSTRADE LIBERALIZATIONTRADE UNIONSTRADE-OFFTRANSACTION COSTSTRANSFER OF OWNERSHIPTRANSMISSION LINESUNEMPLOYMENTUNIVERSAL ACCESSVILLAGEVOLTAGEVOUCHERSWEALTH10.1596/19986