Estimating the Economic Impact of Alternative Wealth Distribution Policies in Kuwait

Principal Investigator: Professor Steffen Hertog
Duration: February 2018–June 2021

Kuwait City
Kuwait City

GCC governments share their oil wealth with their citizen population through two key channels which are economically distortive and socially inequitable: low domestic energy prices and excess employment of citizens in the public sector. Both are highly distortionary in general and particularly pronounced in Kuwait. Low domestic energy prices disproportionately benefit wealthy consumers (who tend to consume more), incentivize general over-consumption, distort investment decisions, and lead to declining energy efficiency. Guaranteed employment of citizens in the public sector distorts labour markets by drawing nationals out of private employment while undermining the efficiency of public administration and often excluding young and female labour market participants.

These distortions and conflicts are increasingly well understood in academic and policy literature. The debate is still short on practical solutions to deal with these issues, however. One policy that is both economically and arguably politically superior to the status quo would be the introduction of a universal basic income (UBI) for citizens that would gradually replace energy subsidies and excess public sector employment. Based on field research and policy-maker interviews in Kuwait, the present project will a) spell out different implementation options for a UBI scheme in the Kuwaiti case, and b) estimate the likely impact of different UBI schemes on key measures of economic sustainability and diversification.

Principal Investigator

Steffen Hertog

Steffen Hertog

Steffen is Associate Professor in Comparative Politics in the Department of Government.


Colleemalay, Katrina

Katrina Colleemalay

Katrina is a Research Assistant on the project.

Alwazir, Khalil

Khalil Alwazir

Khalil is a Research Assistant on the project.

Noor Lakhdar Toumi

Noor Lakhdar-Toumi

Noor is a Research Assistant on the project.

Pepper, Harry 200x200

Harry Pepper

Harry is a Research Assistant on the project.





LSE Middle East LSEMiddleEast

RT @CarnegieEndow: 🔔 Job alert—Carnegie is hiring a director for our DC-based Middle East program! Qualifications include: 🔹 Hold a PhD or…

7 hours ago

Reply Retweet Favorite

LSE Middle East LSEMiddleEast

RT @CH_MENAP: (1/1) 🇮🇶 | #Sadrists have “been equally destructive as any of the other players in undermining the fabric of the #Iraqi state…

7 hours ago

Reply Retweet Favorite