Energy Subsidies and Social Public Expenditures in Emerging and Developing Countries

Abstract

This article examines the effect of energy subsidies on social public expenditures for a sample of 57 emerging and developing countries over the period 2004-2019. The results of the system-based GMM approach reveal that energy subsidies negatively and significantly influence social public expenditures in the full panel, the poor, and resource-rich countries in our sample. These results confirm a political implication that consists in rationalizing energy subsidies in order to raise funds to support social public expenditures in emerging and developing countries.