Consumer subsidies in post-crisis Argentina

Résumé 0

Project Summary: Developing countries devote significant resources to lowering consumer prices for basic goods and services such as food and electricity. This article explains the political logic of the adoption and growth of broad-based consumer subsidies. The authors argue that consumer subsidies often constitute policy traps—ad hoc measures to address unexpected problems that quickly become entrenched. At first, subsidizing consumer prices is an affordable means of helping the population cope with income shocks. Over time, however, environmental pressures and fears of political backlash against repeal reinforce one another, increasing the fiscal burden subsidies impose and dramatically raising the political cost of program exit. This framework is used to analyze the meteoric growth and deep entrenchment of utilities subsidies in post-crisis Argentina. Puzzlingly, in Argentina subsidies grew despite the private provision of subsidized services—making it difficult for the government to claim credit—even in sectors with weakly organized interests. Data Abstract: The main sources of qualitative data used for identifying the relevant causal process observations are anonymous interviews with key informants, newspaper archives, secondary literature, public opinion surveys, and papers by business associations. The article also relies significantly on quantitative data. These include time-series data on the crucial variables (levels of spending on subsidy programs, labor costs of public utility providers, geographic targeting of subsidies), as well as key statistics that strengthen inference (e.g., critical moments of change in the price of imported gas, levels of investment of urban bus providers, or levels of public support for the subsidy program). Files Description: The shared material is divided into several clusters, each including a uniform type of data (e.g. spreadsheets with datasets on urban bus transportation subsidy programs; newspaper archive). Each cluster is composed of a dataset (or several datasets) and a Data Supplement file. The project also includes a Documentation Data Supplement for each cluster, as well as a comprehensive Introductory Data Supplement listing all the files.