Subsidy Reform and Sustainable Development

Subsidies are pervasive in OECD countries and are among the most powerful public policy instruments.  But they often introduce unintended consequences, such as budget deficits, pollution, unemployment and trade distortions.Subsidy reform depends on better understanding of their economic, environmental and social costs and benefits at national and international levels.  Such an integrated perspective on subsidies can lead to greater transparency about their impacts and can also provide a range of arguments for overcoming vested interests to prompt subsidy reform.This report contains the proceedings of an OECD workshop on subsidy reform held in October 2005 under the auspices of the OECD programme on sustainable development.  It provides an overview of approaches for assessing subsidies and associated taxes, and looks at country experiences in reforming subsidies in the agriculture, fisheries, industry, and transport sectors.