Ecuador has been shaken by violent protests after the government announced that it would cut fuel subsidies as part of a larger austerity package negotiated with the International Monetary Fund, IMF, to secure a $ 4.2 billion loan. Prices for diesel fuel more than doubled, with gas prices rising as well. Widespread riots erupted which forced the government out of the country’s capital Quito at one point. Late Sunday night, after hours of negotiation that were brokered by the Catholic church and the United Nations, president Lenin Moreno and leaders of the country’s indigenous peoples have reached a deal to cancel the disputed austerity package.
Protests against rising fuel prices extend beyond Ecuador. In France, the so-called Yellow Vests movement started over the government’s decision to increase taxes on gas last year. Other examples include Indonesia in 1998, Myanmar in 2007 and Nigeria movement in 2012. Recent research on Indonesia has shown that a promising strategy in ending fuel subsidies might be in shifting to more targeted programs. However, this is only feasible if local corruption is sufficiently low. Otherwise, people will want to stick to universal programs like fuel subsidies because local authorities cannot be