Bibliographic Details
| Title: |
Fuel Subsidies in Ecuador: A Computable General Equilibrium Model for Targeting Evaluation. |
| Authors: |
Montenegro-Casa, Cristhian1 cmontenegro.am@gmail.com, Ramírez-Álvarez, José1 |
| Source: |
Latin American Research Review. Jun2025, Vol. 60 Issue 2, p337-365. 29p. |
| Subject Terms: |
*ECONOMIC history, *SUBSIDIES, *MACROECONOMICS, *ECONOMIC models, COMPUTABLE general equilibrium models |
| Abstract (English): |
Fuel subsidies have been an enduring policy in Ecuador’s political and economic history. Given their lack of targeting and high opportunity cost, they have been amply criticized. As of 2017, the Ecuadorian government started a budget consolidation plan that so far has involved seven reforms to subsidies policy in less than seven years. In late 2019, in response to social unrest motivated by a temporal elimination of fuel subsidies, the government pledged to study new targeting mechanisms for this policy to mitigate the impact on the most vulnerable sectors. This work seeks to contribute to that effort by evaluating the macroeconomic effects of these subsidies and serving as a guideline for targeting. A computable general equilibrium model is used to assess counterfactual scenarios. The results suggest that by implementing progressiveness and productive linkage criteria, targeting household final consumption and intermediate consumption is a feasible way to reduce the reforms’ negative effects. [ABSTRACT FROM AUTHOR] |
| Abstract (Spanish): |
Los subsidios a los combustibles han sido una política persistente en la historia política y económica de Ecuador. Por su falta de focalización y alto costo de oportunidad, estos han sido ampliamente criticados. En 2017 el gobierno ecuatoriano comenzó un plan de consolidación fiscal que hasta el momento ha incluido siete reformas a la política de subsidios en menos de siete años. A finales de 2019, en respuesta al estallido social motivado por la eliminación temporal de los subsidies a los combustibles, el gobierno se comprometió a estudiar nuevos mecanismos de focalización para mitigar el impacto en los sectores más vulnerables. Este trabajo busca contribuir a este objetivo al evaluar los efectos macroeconómicos de estos subsidios para servir de guía para la focalización. Se utiliza un modelo de equilibrio general computable. Los resultados sugieren que, tras implementar criterios de progresividad y encadenamientos productivos, la focalización en el consumo final de los hogares y el consumo intermedio de las industrias es una alternativa plausible para reducir el impacto negativo de las reformas. [ABSTRACT FROM AUTHOR] |
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| Database: |
Business Source Index |
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