Water, electricity, and the poor : who benefits from utility subsidies? Kristin Komives; World Bank.

By:

Komives, Kristin

Contributor(s):

Foster, Vivien

Material type: Text

9788174466013

Subject(s):

DDC classification:

333.7

Contents:

Infrastructure Services Are Important to Economies and Households 2 -- Many Still Lack Access to Improved Water and Electricity Services 3 -- Are Subsidies the Answer? 4 -- Utility Subsidies Are Also Redistributive Mechanisms 5 -- Objective of This Book: Assessing the Targeting Performance of Subsidies 5 -- 2 A Typology of Consumer Utility Subsidies 8 -- What Types of Consumer Utility Subsidies Exist? 8 -- How Are Subsidies Funded? 14 -- How Prevalent Are Different Types of Subsidies? 19 -- Why Are Subsidies So Prevalent? 30 -- 3 The Rationale for Subsidizing Services for the Poor 36 -- Subsidies Are Instruments of Sectoral Policy 36 -- Utilities Subsidies Are Also Instruments of Broader Social Policy 46 -- 4 The Determinants of Targeting Performance: A Conceptual Framework 52 -- Data and Methodology 52 -- Conceptual Framework: The Determinants of Subsidy Performance 56 -- 5 The Targeting Performance of Quantity-Based Subsidies 70 -- A Snapshot of Performance: Quantity-Targeted Subsidies Are Regressive 70 -- The Access Handicap: Only Connected Households Are Potential Beneficiaries 74 -- Metering: A Necessary Condition for Quantity Targeting 77 -- Targeting Potential: Do the Poor Consume Less Than the Rich? 79 -- Beneficiary Targeting in Practice: No One Is Excluded 85 -- Benefit Targeting in Practice: High-Volume Consumers Receive Larger Subsidies 86 -- 6 Can the Targeting Performance of Consumption Subsidies Be Improved? 92 -- Improvement of Subsidy Performance by Modifying Tariff Design? 92 -- Beyond Quantity Targeting: Can Subsidy Performance Be Improved with Administrative Selection? 98 -- Beyond Private Connections: How Do Alternative Forms of Consumption Subsidies Perform? 114 -- 7 The Targeting Performance of Connection Subsidies 122 -- Universal Connection Subsidies: Subsidy Performance If All Who Could Benefit Actually Did 124 -- Targeted Connection Subsidies: Can Performance Be Improved? 125 -- Assumptions in the Simulations: Will They Hold in Practice? 127 -- Subsidy Funding and Implementation: How Do They Affect Distributional Incidence? 132 -- 8 Consumer Utility Subsidies as Instruments of Social Policy 136 -- What Is the Benefit Targeting Performance of Utility Subsidies Relative to Other Transfer Mechanisms? 136 -- What Is the Distribution of Subsidy Benefits Relative to Income? 140 -- Do Subsidies Provide Material Benefits for Poor Recipients? 143 -- To What Extent Do Subsidies Contribute to Poverty Reduction? 145 -- 9 Beyond Subsidies-Other Means of Achieving Sectoral Goals 151 -- Cost Reduction Measures: Bringing Down the Cost Recovery Threshold? 152 -- Billing and Payment Systems: Matching the Cash Flow of the Poor? 155 -- Legal and Administrative Barriers: What Removing Nonprice Obstacles Does to Serving the Poor 158 -- How Prevalent Are Utility Subsidies? 165 -- How Do Standard Quantity-Targeted Utility Subsidies Perform? 166 -- Why Do Quantity-Targeted Utility Subsidies Perform So Poorly? 167 -- Do Quantity-Targeted Subsidies Perform Differently for Water and Electricity? 167 -- Is It Possible to Improve the Design of Quantity-Targeted Subsidies? 168 -- Are the Alternatives to Quantity Targeting Any Better? 168 -- Do Connection Subsidies Perform Better Than Consumption Subsidies? 169 -- Do These Conclusions Vary across Geographical Regions? 170 -- Are Utility Subsidies as Effective as Other Measures of Social Protection? 171 -- Do Utility Subsidies Have a Material Impact on Disposable Incomes? 171 -- Are There Viable Alternatives to Utility Subsidies? 171 -- Appendix B Electricity: Coverage, Expenditure, and Consumption 184 -- Appendix C Water: Coverage, Expenditure, and Consumption 195 -- Appendix D Electricity: Consumption Subsidy Data 208 -- Appendix E Water: Consumption Subsidy Data 226 -- Appendix F Water: Connection Subsidy Data 244 -- Appendix G Burden Limit: Consumption Subsidy Data 250 -- Appendix H Increasing Block Tariff Structures 253 -- 2.1 Quantity-Targeted Subsidies in Tariff Structures 13 -- 2.2 Indicative Cost-Recovery Ranges for Water Services 20 -- 2.3 Indicative Cost-Recovery Ranges for Electricity 25 -- 3.1 Methodologies for Measuring Willingness to Pay 38 -- 5.1 The Challenge of Comparing Consumption Levels of the Rich and the Poor 80 -- 6.1 Funding Colombia's Geographically Targeted Subsidy Scheme 105 -- 6.2 Chile's ficha CAS, Reducing the Cost of Means Testing 109 -- 6.3 Metering and Water Subsidy Performance in Kathmandu 115 -- 7.1 Determinants of Targeting Performance 131 -- 8.2 Poverty Reduction Effect of the Honduran Electricity Subsidy 146 -- 2.1 Who Ultimately Captures Government-Funded Subsidies to Utilities? 15 -- 3.1 Willingness to Pay for Water against Full Cost Tariff in Central America 39 -- 3.2 Willingness to Pay for Water Supply against Current Tariff in Dehra Dun, India 40 -- 3.3 Monthly Residential Electricity Expenditure Patterns by Region 41 -- 3.4 Monthly Residential Water Expenditure Patterns by Region 42 -- 3.5 Affordability of Full Cost Charges for Utility Services in Urban Areas 44 -- 4.1 Decomposing Subsidy Performance 58 -- 5.1 Measures of Beneficiary and Benefit Incidence of Quantity-Targeted Subsidies 71 -- 5.2 Effect of Poverty Assumption on Benefit Targeting Performance Indicator 75 -- 5.3 Average Monthly Electricity Consumption per Household, by Quintile 82 -- 5.4 Electricity Consumption among Poor and Nonpoor Households in Guatemala 83.

Summary: While consumer utility subsidies are widespread in both the water and electricity sectors, their effectiveness in reaching and distributing resources to the poor is the subject of much debate. Water, Electricity, and the Poor brings together empirical evidence on subsidy performance across a wide range of countries. It documents the prevalence of consumer subsidies, provides a typology of the many variants found in the developing world, and presents a number of indicators useful in assessing the degree to which such subsidies benefit the poor, focusing on three key concepts: beneficiary incidence, benefit incidence, and materiality. The findings on subsidy performance will be useful to policy makers, utility regulators, and sector practitioners who are contemplating introducing, eliminating, or modifying utility subsidies, and to those who view consumer utility subsidies as a social protection instrument.

List(s) this item appears in: Book exhibit -World book Day 23-April-2022

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Holdings
Item type	Current library	Collection	Call number	Status	Date due	Barcode	Item holds
Reference	Library Annexe Reference	REFERENCE	333.7/ KOM/ 29360 (Browse shelf(Opens below))	Not for loan		11129360

Total holds: 0

Infrastructure Services Are Important to Economies and Households 2 --
Many Still Lack Access to Improved Water and Electricity Services 3 --
Are Subsidies the Answer? 4 --
Utility Subsidies Are Also Redistributive Mechanisms 5 --
Objective of This Book: Assessing the Targeting Performance of Subsidies 5 --
2 A Typology of Consumer Utility Subsidies 8 --
What Types of Consumer Utility Subsidies Exist? 8 --
How Are Subsidies Funded? 14 --
How Prevalent Are Different Types of Subsidies? 19 --
Why Are Subsidies So Prevalent? 30 --
3 The Rationale for Subsidizing Services for the Poor 36 --
Subsidies Are Instruments of Sectoral Policy 36 --
Utilities Subsidies Are Also Instruments of Broader Social Policy 46 --
4 The Determinants of Targeting Performance: A Conceptual Framework 52 --
Data and Methodology 52 --
Conceptual Framework: The Determinants of Subsidy Performance 56 --
5 The Targeting Performance of Quantity-Based Subsidies 70 --
A Snapshot of Performance: Quantity-Targeted Subsidies Are Regressive 70 --
The Access Handicap: Only Connected Households Are Potential Beneficiaries 74 --
Metering: A Necessary Condition for Quantity Targeting 77 --
Targeting Potential: Do the Poor Consume Less Than the Rich? 79 --
Beneficiary Targeting in Practice: No One Is Excluded 85 --
Benefit Targeting in Practice: High-Volume Consumers Receive Larger Subsidies 86 --
6 Can the Targeting Performance of Consumption Subsidies Be Improved? 92 --
Improvement of Subsidy Performance by Modifying Tariff Design? 92 --
Beyond Quantity Targeting: Can Subsidy Performance Be Improved with Administrative Selection? 98 --
Beyond Private Connections: How Do Alternative Forms of Consumption Subsidies Perform? 114 --
7 The Targeting Performance of Connection Subsidies 122 --
Universal Connection Subsidies: Subsidy Performance If All Who Could Benefit Actually Did 124 --
Targeted Connection Subsidies: Can Performance Be Improved? 125 --
Assumptions in the Simulations: Will They Hold in Practice? 127 --
Subsidy Funding and Implementation: How Do They Affect Distributional Incidence? 132 --
8 Consumer Utility Subsidies as Instruments of Social Policy 136 --
What Is the Benefit Targeting Performance of Utility Subsidies Relative to Other Transfer Mechanisms? 136 --
What Is the Distribution of Subsidy Benefits Relative to Income? 140 --
Do Subsidies Provide Material Benefits for Poor Recipients? 143 --
To What Extent Do Subsidies Contribute to Poverty Reduction? 145 --
9 Beyond Subsidies-Other Means of Achieving Sectoral Goals 151 --
Cost Reduction Measures: Bringing Down the Cost Recovery Threshold? 152 --
Billing and Payment Systems: Matching the Cash Flow of the Poor? 155 --
Legal and Administrative Barriers: What Removing Nonprice Obstacles Does to Serving the Poor 158 --
How Prevalent Are Utility Subsidies? 165 --
How Do Standard Quantity-Targeted Utility Subsidies Perform? 166 --
Why Do Quantity-Targeted Utility Subsidies Perform So Poorly? 167 --
Do Quantity-Targeted Subsidies Perform Differently for Water and Electricity? 167 --
Is It Possible to Improve the Design of Quantity-Targeted Subsidies? 168 --
Are the Alternatives to Quantity Targeting Any Better? 168 --
Do Connection Subsidies Perform Better Than Consumption Subsidies? 169 --
Do These Conclusions Vary across Geographical Regions? 170 --
Are Utility Subsidies as Effective as Other Measures of Social Protection? 171 --
Do Utility Subsidies Have a Material Impact on Disposable Incomes? 171 --
Are There Viable Alternatives to Utility Subsidies? 171 --
Appendix B Electricity: Coverage, Expenditure, and Consumption 184 --
Appendix C Water: Coverage, Expenditure, and Consumption 195 --
Appendix D Electricity: Consumption Subsidy Data 208 --
Appendix E Water: Consumption Subsidy Data 226 --
Appendix F Water: Connection Subsidy Data 244 --
Appendix G Burden Limit: Consumption Subsidy Data 250 --
Appendix H Increasing Block Tariff Structures 253 --
2.1 Quantity-Targeted Subsidies in Tariff Structures 13 --
2.2 Indicative Cost-Recovery Ranges for Water Services 20 --
2.3 Indicative Cost-Recovery Ranges for Electricity 25 --
3.1 Methodologies for Measuring Willingness to Pay 38 --
5.1 The Challenge of Comparing Consumption Levels of the Rich and the Poor 80 --
6.1 Funding Colombia's Geographically Targeted Subsidy Scheme 105 --
6.2 Chile's ficha CAS, Reducing the Cost of Means Testing 109 --
6.3 Metering and Water Subsidy Performance in Kathmandu 115 --
7.1 Determinants of Targeting Performance 131 --
8.2 Poverty Reduction Effect of the Honduran Electricity Subsidy 146 --
2.1 Who Ultimately Captures Government-Funded Subsidies to Utilities? 15 --
3.1 Willingness to Pay for Water against Full Cost Tariff in Central America 39 --
3.2 Willingness to Pay for Water Supply against Current Tariff in Dehra Dun, India 40 --
3.3 Monthly Residential Electricity Expenditure Patterns by Region 41 --
3.4 Monthly Residential Water Expenditure Patterns by Region 42 --
3.5 Affordability of Full Cost Charges for Utility Services in Urban Areas 44 --
4.1 Decomposing Subsidy Performance 58 --
5.1 Measures of Beneficiary and Benefit Incidence of Quantity-Targeted Subsidies 71 --
5.2 Effect of Poverty Assumption on Benefit Targeting Performance Indicator 75 --
5.3 Average Monthly Electricity Consumption per Household, by Quintile 82 --
5.4 Electricity Consumption among Poor and Nonpoor Households in Guatemala 83.

While consumer utility subsidies are widespread in both the water and electricity sectors, their effectiveness in reaching and distributing resources to the poor is the subject of much debate. Water, Electricity, and the Poor brings together empirical evidence on subsidy performance across a wide range of countries. It documents the prevalence of consumer subsidies, provides a typology of the many variants found in the developing world, and presents a number of indicators useful in assessing the degree to which such subsidies benefit the poor, focusing on three key concepts: beneficiary incidence, benefit incidence, and materiality. The findings on subsidy performance will be useful to policy makers, utility regulators, and sector practitioners who are contemplating introducing, eliminating, or modifying utility subsidies, and to those who view consumer utility subsidies as a social protection instrument.

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Water, electricity, and the poor : who benefits from utility subsidies? Kristin Komives; World Bank.