Energy Subsidies and Social Public Expenditures in Emerging and Developing Countries

Abstract

This article examines the effect of energy subsidies on human capital spending for a sample of 57 emerging and developing countries over the period 2004-2019. The results of the system-based GMM approach reveal that energy subsidies negatively and significantly influence social spending on human capital in the full panel, the poor and resource-rich countries in our sample. These results confirm a political implication which consists in rationalizing energy subsidies in order to raise funds to support social spending on human capital in emerging and developing countries.