Strand, Jon2013-04-122013-04-122013-03https://hdl.handle.net/10986/13190While notoriously inefficient, fuel subsidies are widespread, and in many cases politically stable. This paper discusses and models various political economy aspects of fuel subsidies, focusing on gasoline and kerosene. Both economic and political are considered to explain differences in subsidies, with particular focus on democratic and autocratic governments. A political process is modeled whereby a promise of low fuel prices is used in democracies to attract voters, and in autocracies to mobilize support among key groups. Subsidies to fuels are viewed as either easier to observe, easier to commit to, easier to deliver, or better targeted at core groups, than other public goods or favors offered by rulers. Easier commitment and delivery than for regular public goods can explain the high prevalence of such policies in autocracies, and also in young democracies where the capacity to commit to or deliver complex public goods is not yet fully developed. The analysis provides a framework for empirical testing and verification.en-USCC BY 3.0 IGOAPPROACHAUTOMOBILEBALANCEBUYING POWERCARCAR OWNERSCAR OWNERSHIPCAR-OWNING HOUSEHOLDSCARSCOMPARATIVE ECONOMICSCONCENTRATIONSCONGESTIONCONGESTION PROBLEMSDEBTDECISION MAKINGDEVELOPMENT ECONOMICSDEVELOPMENT POLICYDIESELDRIVERSDRIVINGECONOMIC ANALYSISECONOMIC GROWTHECONOMIC GROWTH RATESECONOMIC POLICIESELASTICITYELECTRIC POWERENDOGENOUS VARIABLESENERGY STRATEGYENVIRONMENTAL TAXATIONEXPECTED UTILITYEXTERNALITIESEXTERNALITYFORECASTSFOSSILFOSSIL FUELFUELFUEL CONSUMPTIONFUEL DEMANDFUEL PRICEFUEL PRICESFUEL SUBSIDIESFUEL TAX RATESFUEL TAXATIONFUEL TAXESFUEL TYPESFUELSFUTURE RESEARCHGASGAS PRICEGAS PRICESGASOLINEGASOLINE CONSUMPTIONGASOLINE DEMANDGASOLINE PRICEGASOLINE PRICESGASOLINE TAXHIGHWAYSINCOMEINCOME DISTRIBUTIONINCOME GROUPSINCOME LEVELSINEFFICIENCYINTERNATIONAL FUEL TAXKEROSENEKEROSENE SUBSIDIESMACROECONOMICSMOBILITYMOTOR FUELMOTOR FUEL TAXMOTOR FUELSMOTOR VEHICLEMOTOR VEHICLE OWNERSMOTOR VEHICLE OWNERSHIPMOTOR VEHICLE USEMOTOR VEHICLESNEGATIVE EXTERNALITIESOILOIL PRICESPASSENGER CARSPOLITICAL ECONOMYPOLITICAL POWERPOLLUTIONPRICE OF FUELSPRICE OF GASOLINEPRIVATE GOODSPUBLICPUBLIC ECONOMICSPUBLIC FINANCEPUBLIC GOODPUBLIC GOODSPUBLIC TRANSPORTPUBLIC TRANSPORTATIONPURCHASESPURCHASING POWERROADROAD USETAXTAX ASSESSMENTTAX REVENUETOTALITARIAN REGIMESTOTALITARIANISMTRANSPORT ECONOMICSTRANSPORT RESEARCHTRANSPORTATION COSTTRANSPORTATION RESEARCHTRANSPORTATION SYSTEMTRAVEL DEMANDTRAVEL DEMAND PREDICTIONSTRUEURBAN AREASUTILITY FUNCTIONUTILITY FUNCTIONSVEHICLE OWNERSVOTER PREFERENCESVOTERSWorld Bank10.1596/1813-9450-6392