From party programmes to climate policy: A comparative analysis of fossil fuel subsidy reform in OECD countries

Despite international commitments to phase out fossil fuel subsidies, OECD countries exhibit substantial variation in subsidy levels. This study examines how governing party preferences and institutional context jointly shape subsidy policy across 28 OECD countries from 2010 to 2022. Integrating party manifesto data with fossil fuel subsidy levels in cabinet-year panels, the analysis reveals conditional relationships between governing party preferences and policy outcomes. Pro-environmental governments reduce subsidies primarily when holding parliamentary majorities, while market-liberal preferences show positive associations with subsidies under minority governance. Critically, the combination of environmental and market-liberal commitments produces the strongest subsidy reductions—but only within majority governments. This three-way interaction suggests that ‘green’ coalitions require institutional leverage to overcome entrenched fossil fuel interests and phase out fossil fuel subsidies. The findings demonstrate that neither ideology nor institutional capacity alone drives reform; both are necessary. These results help explain why OECD subsidy levels vary despite similar climate pledges, highlighting that translating electoral mandates into climate policy is contingent on both programmatic commitments and legislative control.