Evaluación ex-ante de la eficiencia y equidad del subsidio a los combustibles en el Ecuador mediante un Modelo de Equilibrio General Computable

Abstract

Fuel subsidy policy has been transversal to the economic history of Ecuador. These subsidies have received several criticisms due to their lack of targeting and the high opportunity cost. As of 2017, the Ecuadorian Government started a fiscal consolidation plan that, so far, has involved three reforms to this policy, the last one failed because of social movements pressure. In late 2019, Ecuador engaged to study new targeting mechanisms for this policy in order to mitigate the impact of the reforms on the most vulnerable sectors. Therefore, the following study evaluates the macroeconomic effects, in terms of efficiency and equity, of these subsidies for giving guidelines under an empirical-quantitative approach. A Computable General Equilibrium Model is used for the evaluation of counterfactual scenarios which suggest that, if progressiveness and productive linkages criteria are considered, targeting on the final consumption of households and the intermediate consumption of firms is a plausible alternative to reduce the negative effects of the reforms.