Take-up and Impact of Electricity Subsidies in the Developing World: Evidence from Indonesia

Many countries subsidize electricity to increase access to affordable, reliable energy for people experiencing poverty and encourage shifts towards cleaner energy. Targeting progressive subsidies through electricity systems can be useful in low- and middle-income countries where income data is limited but electricity coverage is high and usage correlates with income. During Covid-19, the Government of Indonesia (GoI) implemented special electricity subsidies, with differences by connection type, prior usage, prepaid vs. postpaid accounts, and phase of the pandemic. As the GoI is now seeking to revamp its electricity subsidy policies, researchers will use the rules and cutoffs of the Covid-era subsidies, together with administrative data from Indonesia’s state-owned electricity provider matched to Indonesia’s National Socioeconomic Survey, to better understand electricity consumers and the implications of electricity policies and pricing. In doing so, researchers will develop relationships with key government stakeholders and identify policy-relevant research questions that could be answered through future randomized evaluations.