Utilising applied behavioural research to execute subsidy reform in Kuwait

Hessah Al-Ojayan, George Gaskell and Giuseppe A. Veltri

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: The Kuwait government is highly dependent on oil revenues; its fiscal position is exposed to fluctuations in crude oil prices. Reducing expenditures will make Kuwait’s government more fiscally robust in the context of volatile oil markets. Reforming subsides is one way by which the government can reduce expenditures. Electricity and water subsidies in Kuwait represent about 11–20 percent of fiscal expenditures. The goal of this paper is to identify behavioural interventions, ‘nudges’, that could help save electricity in the household sector, which consumes 50 percent of electricity produced. We developed the nudges by first, reviewing relevant behavioural literature; second, conducting focus group interviews; third, comparing Kuwait to other Gulf Cooperation Council countries; and last, testing the cultural appropriateness of the nudges. The first nudge we propose is making the government subsidy more salient for citizens. The second is activating social norms. The third is framing, adding a message that makes subscribers care for future generations. Lastly, there is the recognition of saving efforts through a reward system.

JEL-codes: E6 J01 R14 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2020-02-01
New Economics Papers: this item is included in nep-ara, nep-ene and nep-mac
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:103631

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