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Submitted by T.V. Somanathan on
This is a very interesting insight. A government may find it much easier to remove distortions if there is a clear domestic constituency which demands their removal and if the removal were part of an 'industrial policy' meant to promote growth in specific sectors with credible prospects of job and income creation. Often the political economy of 'distortion removal' is itself distorted by the fact that the losers from distortion removal can clearly identify themselves (a la Nigerian fuel subsidy) while the beneficiaries are unidentified and do not even know that they might benefit, leave alone how much. T.V.