Electricity subsidies are getting done better

On-Budget subsidies create more gratitude in the voter

There is an increasing use, by policymakers, of explicit electricity subsidies that are transparent to the recipient and explicitly paid by the exchequer. This strategy offers an important alternative to the traditional complexities of the electricity sector, where government ownership and distorted regulation were used as a way to deliver less transparent subsidies to favoured groups. Carried two steps further, these incipient policy initiatives can take us closer to an efficient electricity sector, which operates on market principles, coupled with political objectives being met through explicit subsidies. More generally, the best path to prosperity lies in stoking the engine of