The Political Economy of Fuel Subsidies in Colombia

Helena Garcia Romero and Laura Calderon Etter
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Helena Garcia Romero: Fedesarrollo
Laura Calderon Etter: Fedesarrollo

No 61, OECD Environment Working Papers from OECD Publishing

Abstract: Colombia has made progress towards eliminating fuel and diesel subsidies and reducing discretionary spaces allowing for artificially low fuel prices, but challenges remain. Colombia has provided explicit and implicit subsidies to gasoline and diesel since 1983, costing the government up to 1.6% of GDP. This paper discusses the political economy of fuel subsidies in the country to understand why reform has been so slow. It focuses on the groups benefitting from the subsidies and their political participation, as well as other economic impacts that have limited the political will to eliminate them. The Colombian case serves as an example of the difficulty of fully eliminating fuel subsidies once they are already established. La Colombie a fait des progrès pour éliminer les subventions accordées aux carburants et au gazole et réduire les possibilités de faire baisser artificiellement les prix des carburants, mais certaines difficultés demeurent. La Colombie applique depuis 1983 des subventions explicites et implicites à l’essence et au gazole, représentant jusqu’à 1.6 % de son PIB. On trouvera dans le présent rapport une analyse de l’économie politique des subventions aux carburants qui permettra de mieux comprendre la lenteur de la réforme dans ce pays. Le rapport s’intéresse aux groupes qui bénéficient de ces subventions et à leur participation politique, ainsi qu’aux autres impacts économiques qui ont entamé la volonté politique de les supprimer. L’exemple de la Colombie illustre la difficulté d’éliminer complètement les subventions aux carburants une fois établies.

Keywords: Colombia; Colombie; fossil-fuel subsidies; political economy; économie politique (search for similar items in EconPapers)
JEL-codes: H23 O13 Q48 (search for similar items in EconPapers)
Date: 2013-12-10
New Economics Papers: this item is included in nep-ene, nep-lam and nep-tre
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:oec:envaaa:61-en

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