Middle East and North Africa

A Brief Political Economy of Energy Subsidies in the Middle East and North Africa

Energy subsidies are among the most pervasive, and most controversial fiscal policy tools in the Middle East and North Africa (MENA). In a region with few functioning social welfare systems, subsidized energy prices continue to form an important social safety net, albeit a highly costly and inefficient one. In the MENA region's oil and gas producers, low energy prices have also historically formed an important element of an unwritten social contract, where governments extracted their countries' hydrocarbon riches in return for citizens' participation in sharing resource rents.

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