Note: Front Cover -- Contents -- Foreword -- Acknowledgments -- About the Editors and Contributors -- Executive Summary -- Abbreviations -- Chapter 1 Overview -- Key Findings -- Policy Directions -- Organization of the Study -- Summary of Results, by Country -- Annex 1A: Relevant Literature on Electricity Subsidies and Their Impacts -- Annex 1B: Electricity Subsidies and the Environment -- Notes -- Bibliography -- Chapter 2 The Electricity Sector in Central America and Its Subsidy Mechanisms -- Behind the Rise of Subsidies: Rising Electricity Consumption and Costs -- Subsidy Mechanisms in Central America -- Country Summaries of Existing Subsidy Mechanisms -- Electricity Subsidies in Central America: Key Messages -- Annex 2A: The Electricity Sectors of Central America -- Notes -- Bibliography -- Chapter 3 The Fiscal Impact of Electricity Subsidies in Central America -- Central American Electricity Subsidies in the International Context -- Calculating the Cost of Electricity Subsidies in Central America -- Fiscal Policy Implications of Electricity Subsidies -- Conclusion -- Annex 3A: Regional Aggregates for International Benchmarking of Fiscal Costs of Electricity Subsidies -- Annex 3B: Methodology for Estimating the Fiscal Cost of Electricity Subsidies in Central American Countries -- Notes -- Bibliography -- Chapter 4 The Distributional Impact of Electricity Subsidies in Central America -- Do Subsidies Make Electricity More Affordable? -- Are Subsidies Efficiently Targeted? -- A Closer Look: Incidence Analysis, by Country -- Key Messages -- Annex 4A: Methodology for Estimating Electricity Consumption in Central America -- Notes -- Bibliography -- Chapter 5 Determinants of Electricity Subsidy Performance in Central America -- Measuring the Efficiency of the Distribution of Electricity Subsidies -- Targeting Performance in Central America. , Drivers of Progressivity: Coverage Ratio and Average Per-Unit Subsidy -- Drivers of Regressivity: Access Ratio and Consumption Ratio -- How Do Individual Mechanisms in Each Country Perform? -- Annex 5A: Derivation of the Targeting Performance Indicator -- Annex 5B: Targeting Performance Indicator (TPI) Results for Target Groups from Poorest 10 Percent through Poorest 40 Percent, 2016 -- Notes -- Bibliography -- Chapter 6 Simulating Policy Options -- Reform Scenarios -- Simulations by Country -- Conclusion -- Notes -- Bibliography -- Boxes -- Box 1.1 Other Relevant Considerations -- Box 1.2 Reforming Subsidies: Lessons Learned from International Experience -- Box 2.1 Untargeted and Indirect Subsidies -- Box 3.1 Electricity Subsidies: Key Concepts, Definitions, and Data Sources -- Box 3.2 The Global Financial Crisis, Fiscal Balances, and Electricity Subsidy Policies in Central America -- Box 3.3 Methodology for Estimating Electricity Subsidy Costs in Central American Countries -- Box 3.4 Fiscal Impact of Nontechnical Losses -- Box 3.5 Fiscal Implications of Panama's Price Stabilization Fund -- Box 3.6 Energy Subsidy Impulse -- Box 3.7 The Commitment to Equity Methodology -- Box 4.1 A Methodological Caveat: No Behavioral Response to Pricing Mechanisms -- Box 4.2 Benefit-Incidence Methodology -- Box 4.3 Measuring the Distribution of Subsidies -- Box 5.1 Policy Design with Imperfect Information: Targeting Based on Quantity -- Box 5.2 Errors of Inclusion and Exclusion -- Figures -- Figure 1.1 Fiscal Cost of Electricity Subsidies, by Country, as a Percentage of Gross Domestic Product, 2012-15 Average -- Figure 1.2 Spending on Electricity Subsidies, by Country, as a Percentage of Gross Domestic Product and Tax Revenues, 2012-15 Average. , Figure 1.3 Public Spending on Electricity Subsidies, Cash-Transfer Programs, Education, and Research and Development in Central America as a Percentage of Gross Domestic Product, 2011-13 Average -- Figure 1.4 Electricity Spending as a Share of Household Income in Central America, by Income Decile, 2016 -- Figure 1.5 Percentage of Subsidies Received by Households in the Top and Bottom 40 Percent of the Income Distribution -- Figure 1.6 Share of Households with Electricity That Received Subsidies, 2016 -- Figure 1.7 Estimated Errors of Inclusion and Exclusion Based on US4 per Day Poverty Line -- Figure 1.8 Average Subsidy per kWh of Subsidized Electricity, by Income Decile, 2016 -- Figure 1.9 Electricity Consumption of Subsidy Beneficiaries, by Income Decile, 2016 -- Figure 1.10 Factors That Determine Targeting Performance for the Poorest 40 Percent of Households -- Figure 2.1 Electrification Rates, 1970-2015 -- Figure 2.2 Annual Electricity Consumption per Capita, 1970-2014 -- Figure 2.3 Share of Renewable and Nonrenewable Sources in Total Power Generation, 2011-15 Average -- Figure 2.4 Electricity Generation, Average, 1996-2000 and 2001-05 -- Figure 2.5 Energy Imports as a Share of Total Energy Consumption, 1991-2000 and 2001-13 -- Figure 2.6 Crude Oil Prices (West Texas Intermediate), 1982-2015 -- Figure 2.7 Index of Ratio of Residential Electricity Consumption and Total Private Consumption from National Accounts, 2000-15 -- Figure 2.8 Average Price per Unit of Residential Electricity Consumption, Select Countries, 2013 -- Figure 2.9 Illustration of a Hypothetical Tariff Rate and Electricity Bills under Increasing Block Tariff (IBT) and Volume-Differentiated Tariff (VDT) Systems -- Figure 2.10 Electricity Consumption and Average Price per kWh, Costa Rica, April 2016. , Figure 2.11 Electricity Consumption and Average Price per kWh, El Salvador, April 2016 -- Figure 2.12 Electricity Consumption and Average Price per kWh, Guatemala, April 2016 -- Figure 2.13 Electricity Consumption and Average Price per kWh, Honduras, April 2016 -- Figure 2.14 Electricity Consumption and Average Price per kWh, Nicaragua, December 2015 -- Figure 2.15 Electricity Consumption and Average Price per kWh, Panama, April 2016 -- Figure 3.1 Electricity Subsidies as a Percentage of Gross Domestic Product, 2011-14 Average -- Figure 3.2 Ratios of Revenue to Gross Domestic Product, 2011-15 Average -- Figure B3.2.1 Fiscal Balances and Ratios of Debt to Gross Domestic Product in Central America, 2005-09 and 2010-15 -- Figure 3.3 Electricity Subsidies as a Share of Total Revenues, Tax Revenues, and Fiscal Deficits, 2011-14 Average -- Figure 3.4 Fiscal Cost of Electricity Subsidies, by Country, as a Percentage of Gross Domestic Product, 2012-15 Average -- Figure 3.5 Cost of Electricity Subsidies Based on Price-Gap Approach in Central America and International Oil Prices, 2011-15 -- Figure 3.6 Cost of Electricity Subsidies Based on Price-Gap Approach, by Country, as a Percentage of Gross Domestic Product, 2012-15 -- Figure 3.7 Contribution of Changes in Tariffs and Costs of Electricity Provision to Changes in Cost of Residential Subsidies -- Figure 3.8 Tax Exemptions as a Percentage of Gross Domestic Product, 2012-15 Average -- Figure 3.9 Total Tax Revenues and Tax Exemptions as a Percentage of Gross Domestic Product, 2012-15 Average -- Figure 3.10 Composition of Cost of Electricity Subsidies as a Percentage of Gross Domestic Product, 2012-15 Average -- Figure B3.4.1 Impact of Nontechnical Losses on Total Electricity Subsidies as a Percentage of Gross Domestic Product, 2012-15 Average -- Figure 3.11 Electricity Subsidies and the Economic Cycle. , Figure B3.6.1 Procyclical Fiscal Policy -- Figure B3.6.2 Countercyclical Fiscal Policy -- Figure 3.12 Moderate and Extreme Poverty Rates, and the Gini Coefficient before and after Fiscal Policy, Circa 2011-12 -- Figure 3.13 Spending on Electricity Subsidies and Tax Revenues, by Country, as a Percentage of Gross Domestic Product, 2012-15 Average -- Figure 3.14 Spending on Electricity Subsidies and Fiscal Deficits, by Country, as a Percentage of Gross Domestic Product, 2012-15 Average -- Figure 3.15 Public Spending on Electricity Subsidies, Cash-Transfer Programs, Education, and Research and Development in Central America as a Percentage of Gross Domestic Product, 2011-13 Average -- Figure 3.16 Projected Reduction in Public Debt-to-Gross Domestic Product Ratios in 2021 If Electricity Subsidies and Related Tax Exemptions Were Eliminated -- Figure 3.17 Projected Public Debt-to-Gross Domestic Product Ratios under the Baseline and Subsidy Reform Scenarios, 2015 and 2021 -- Figure 4.1 Electricity Spending as a Share of Household Income in Central America, by Income Decile, 2016 -- Figure 4.2 Electricity Costs as a Percentage of Household Income of Households Living on Less Than US4 per Day, 2016 -- Figure B4.3.1 A Graphical Representation of the Definitions of Progressivity and Regressivity -- Figure 4.3 Distribution of Electricity Subsidies and Household per Capita Income, 2016 -- Figure 4.4 Percentage of Subsidies That the Bottom and Top 40 Percent Receive, 2016 -- Figure 4.5 Distribution of Subsidies, by Income Percentile, 2016 -- Figure 4.6 Distribution of Electricity Cross-Subsidies in Costa Rica, by Income Decile, 2016 -- Figure 4.7 Distribution of Electricity Subsidies in El Salvador, by Income Decile in 2014 and 2016, and by Quintile in 2014 and 2016. , Figure 4.8 Distribution of Electricity Subsidies in Guatemala, by Income Decile in 2014 and 2016, and by Quintile in 2014 and 2016.