"An exploration of the association between fuel subsidies and fuel riots", World Development
In recent years, dozens of countries have been rocked by riots, often associated with popular demand for fuel. A paper, published today in World Development, by The Policy Practice Director Neil McCulloch (and co-authors Davide Natalini, Noami Hossain and Patricia Justino) uses a new international dataset on fuel riots to explore the effects of fuel prices and price regimes on fuel riots. Unsurprisingly, we find that large domestic fuel price shocks - often linked to international price shocks - are a key driver of riots. But we also show that fuel riots are closely associated with domestic price regimes. Countries that maintain fixed price regimes – often net energy exporters - tend to have large fuel subsidies. When such subsidies become unsustainable, domestic price adjustments are large, often leading to riots.
The full article is available Open Access here.