is likely to have weak and unstable institutions, which here translates into a “weak” fuel pricing policy (low taxes, or subsidies). As democracy matures, politicians become less constrained and true preferences of broad voter groups are heard more clearly. This may often translate into less fuel subsidies. For non-democracies, no such mechanisms are at play. Here rulers are more likely to cater to narrow “selectorate” groups, where fuel subsidies may play more of a role even in the long run. Autocracies are also notoriously less capable of providing more valuable and complex public goods. Energy subsidies then become a key targeted spending instrument to “buy support”, from key groups necessary to stay in power.

Another interesting finding is that regime switches, from democracy to non-democracy or the reverse, are in both cases found to affect fuel prices negatively, although the effects are generally weak. But this conclusion – particularly for the case of a regime switch from nondemocracy to democracy - is more generally in line with other empirical evidence, e g that offered by Keefer (2009). The principal argument is that a “newly-born” democracy can be highly volatile and lack maturity, of both its political leadership and its central administration. This can prompt politicians to take “easy” actions in the short run, to minimize the likelihood of serious conflict that could upset regime stability. One such “easy” action is subsidizing fossil fuels.

Overall, our results regarding effects of regime switches and persistence display an interesting pattern. Once a switch from a non-democratic to a democratic regime occurs, we see an initial drop in fuel prices, and, subsequently, a gradual upward fuel price drift. When the opposite shift (from democratic to non-democratic government) occurs, there is also an initial drop in the price, but no subsequent systematic upward drift.

If we focus on the tenure of the executive politician, measured in number of years, we find results that are statistically significant. The longer an executive politician is in power the lower (higher) the fossil fuel prices (subsidies). The effect is strongest in non-democracies for diesel price relationships. If a non-democratic ruler stays longer in power, diesel prices are in this case lower and hence subsidies to diesel higher.

Tables 5a and 5b presents the results of the way the political system is organized. The first relevant variable _Presidential systemi,t_ is whether the system is parliamentary, or presidential. This variable runs from 0 to 2 and is defined for an Executive Index of Electoral Competition ( _EIEC_ ) larger than 3 (see Appendix B). The value 0 is attributed to countries with a parliamentary system, i.e. with no president or where the legislature elects the chief executive (as e.g. in Germany) except when the legislature cannot easily recall the chief executive (e.g. 2/3 votes for impeachment or when legislation should be dissolved before forcing the chief executive out). In the latter case, and also then president is assembly-elected, the value is 1. Presidential systems with presidents elected directly or by an electoral college (e.g. USA) gets a value 2.

We find a negative and significant effect for a presidential system on both diesel- and gasoline prices. This is not unexpected, as direct voting of a president (as in the USA) makes swing votes essential (Persson and Tabellini, 1999). This stimulates a more targeted redistribution of public resources, which can often be done through clearly visible fossil fuel 26