Water, electricity, and the poor : who benefits from utility subsidies?

This book reviews the prevalence and variants of consumer subsidies found in the developing world and the effectiveness of these subsidies for the poor. It places consumer subsidies in a broader social protection framework and compares them with poverty-focused programmes in other sectors using a common metric. It concludes that the most common subsidy instruments perform poorly in comparison with most other transfer mechanisms. Alternative consumption and connection subsidy mechanisms show more promise, especially when combined with complementary non-price approaches to making utility services accessible and affordable to poor households. The many factors contributing to those outcomes are dissected, identifying those that can be controlled and used to improve performance. The book is aimed at policy makers, utility regulators, and sector practitioners who are seeking ways to make utility services accessible and affordable to the poor and to those who view consumer utility subsidies as an instrument of social protection, for transferring resources to the poor where weak administrative structures make cash transfers infeasible or costly.