World Bank2014-01-302014-01-302013https://hdl.handle.net/10986/16723The efficiency and effectiveness of generalized subsidies as part of a safety net system are questionable. This is because generalized subsidies tend to create distortions in the food and fuel markets and are likely to be regressive and to suffer from significant leakage of benefits to the non-poor, diluting their impact on poverty reduction. They also often have higher administrative costs than cash transfers. The policy response to recent crises highlighted an emerging interest for a transition from food and fuel subsidies toward greater reliance on targeted cash transfer programs in several countries. The transition from a strong reliance on generalized subsidies to more modern and administratively more sophisticated social protection has been witnessed in much of the developing world as countries move from lower to middle income status. However, cutting back subsidies has social as well as political implications, and therefore needs to be managed and implemented appropriately. This paper seeks to examine the implications and aspects of subsidies reform, in particular the socio-political risk of cutting subsidies in the context of modernizing social assistance.en-USCC BY 3.0 IGOACCESS TO SERVICESACCESSIBILITYADMINISTRATIVE COSTSASSISTANCE PROGRAMSBENCHMARKBENEFICIARIESBENEFICIARYBUFFER STOCKSBUSESCARCAR-OWNING HOUSEHOLDSCARSCASH AIDCASH ASSISTANCECASH BENEFITCASH TRANSFERCASH TRANSFER PROGRAMSCASH TRANSFERSCIVIL WARCLIMATE CHANGECOMMODITYCOMMUNITY INVOLVEMENTCONSUMER SUBSIDIESCONSUMER SUBSIDYCONSUMERSCONSUMPTION LEVELSCOPING STRATEGIESDEMOCRACYDEVALUATIONSDEVELOPING COUNTRIESDEVELOPMENT POLICIESDIESELDIVIDENDDRIVERSECONOMIC CRISESECONOMIC GROWTHECONOMIES OF SCALEEMISSIONSENERGY SUBSIDIESENERGY SUBSIDYENVIRONMENTAL ISSUESEXCLUSIONEXPORTSEXPOSUREEXTERNALITIESFARESFINANCIAL CRISESFINANCIAL CRISISFINANCIAL STABILITYFISCAL CRISISFISCAL RISKFOOD COMMODITIESFOOD CONSUMPTIONFOOD DISTRIBUTIONFOOD PRICEFOOD PRICE SUBSIDIESFOOD PRICESFOOD SUBSIDIESFOOD SUBSIDYFOSSIL FUELFOSSIL FUELSFUELFUEL CONSUMPTIONFUEL PRICEFUEL PRICE INCREASEFUEL PRICE INCREASESFUEL PRICESFUEL SUBSIDIESGASOLINEGDPGOVERNANCE INDICATORSGOVERNMENT BUDGETGOVERNMENT CAPACITYGOVERNMENT FUNDSHEALTH CARDSHEALTH INSURANCEHOUSEHOLD SURVEYSHUMAN CAPITALHUMAN DEVELOPMENTIMPORT QUOTASINCOMEINCOME INEQUALITYINCOME LEVELSINCOMESINEFFICIENCYINEQUALITYINFORMATION ASYMMETRYINFRASTRUCTURE INVESTMENTINSTITUTIONAL CAPACITYINTEREST RATESINTERNATIONAL LABOUR ORGANIZATIONKEROSENE SUBSIDYLEAKAGE OF BENEFITSLOW INTEREST RATESMARKET FAILURESMARKET PRICEMARKET PRICESMINIMUM INCOMEMOBILITYNATURAL RESOURCENATURAL RESOURCESOPPORTUNITY COSTPATRONAGEPENSIONSPOLICEPOLITICAL ECONOMYPOLITICAL ECONOMY OF REFORMPOLITICAL RISKPOLITICAL RISKSPOLITICAL STABILITYPOLITICAL SUPPORTPOLITICAL SYSTEMPOLITICAL SYSTEMSPOORPOVERTY ALLEVIATIONPOVERTY LEVELSPOVERTY REDUCTIONPRICE FLUCTUATIONSPRICE LEVELSPRICE OF DIESELPRICE OF FUELPRICE SETTINGPRICE STABILIZATIONPRICE SUBSIDIESPRICE SUBSIDYPROTECTION MECHANISMPROTECTION MECHANISMSPUBLIC ATTITUDESPUBLIC PERCEPTIONPUBLIC PERCEPTIONSPUBLIC POLICYPUBLIC RELATIONSPUBLIC RESOURCESPUBLIC SERVICESPUBLIC SPENDINGPUBLIC SUPPORTREDISTRIBUTIVE POLICIESREFORM PROCESSREGULATORY BODYRICE SUBSIDYRISK REDUCTIONRURAL INFRASTRUCTURESAFETYSAFETY NETSAFETY NET PROGRAMSSAVINGSSHOCKSMALL BUSINESSSMALL ENTREPRENEURSOCIAL ASSISTANCESOCIAL CAPITALSOCIAL CONTRACTSOCIAL COSTSOCIAL INVESTMENTSOCIAL POLICIESSOCIAL PROGRAMSSOCIAL PROTECTIONSOCIAL SAFETY NETSOCIAL SAFETY NETSSOCIAL SECURITYSOCIAL SERVICESSOCIAL SPENDINGSOCIAL WELFARESSNSTREETSSUBSIDIZINGSUPPORT PROGRAMSUSTAINABLE DEVELOPMENTTARGETED SUBSIDIESTARGETED TRANSFERSTARGETINGTAXTAX REFORMTAXI DRIVERSTRADE UNIONSTRANSPARENCYTRANSPORTTRANSPORTATIONTRAVEL COSTSTRIPTRIPSTRUEUNIVERSAL HEALTHUNIVERSAL SUBSIDIESVULNERABLE HOUSEHOLDSWAGESWARWEALTHWELFARE POLICYWELFARE SYSTEMWorld Bank10.1596/16723