The Quest for Subsidies Reforms in the Middle East and North Africa Region: A Microsimulation Approach to Policy Making

Abstract

The book is organized in two parts and ten chapters. Part one, Cross-Country Analyses, covers the comparative analyses across countries. Chapter one provides a synthesis of what we learned about subsidies reforms from a political economy perspective. Chapter two provides a comparative analysis of subsidies and subsidies reforms across countries in U.S. dollars at purchasing power parity (PPP) values. Using the same data used by the country studies, this chapter shows the relative importance of subsidies across countries and income groups and the main winners and losers of subsidy reforms. Part two, Country Case Studies, includes the country-specific analyses. All of the chapters in this part were developed along a similar structure with an introduction, followed by a brief history of subsidies, and then the distributional analysis of subsidies, simulations of subsidies reforms, the political economy of reforms, and a conclusion. All chapters are based on primary microdata and macrodata, and each chapter provides two simulations of reforms. The first simulation was chosen based on what was deemed more relevant for the policy dialogue at the time of preparing the chapters. The second simulation is standard across all chapters and includes the full elimination of subsidies. The book includes as an appendix the User Manual for SUBSIM that illustrates the use of the model and provides all formulas used for the estimations throughout the book.