Hard cash and not subsidies is the way to go

The Roman empire handed out free bread and put on circuses to keep its population happy. Today, subsidising the cost of living means keeping a lid on fuel as well as food prices. With the energy and food crises inflating the cost of subsidies across the developing world, governments are being forced down a route that the World Bank and development economists have urged for years: cushioning poor families by targeted cash payments delinked from the cost of hydrocarbons and carbohydrates. According to a survey of International Monetary Fund economists, explicit fuel subsidies in a sample of developing countries averaged 1.5 per cent of gross domestic product last year, and implicit subsidies through price manipulations, a hefty 4 per cent. Even some oil-exporting countries, where subsidies are easier to afford, are rethinking... [read full story]