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Fiscal Redistribution and Income Inequality in Latin America

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Author Info

  • Goñi, Edwin
  • Humberto López, J.
  • Servén, Luis

Abstract

Summary This paper documents and compares the redistributive performance of Latin American and Western European fiscal systems. Three main conclusions emerge: (i) taxes and transfers widen the difference in income inequality between the two country groups, because (ii) the redistributive impact of the fiscal system is very large in Europe and very small in Latin America; and (iii) where fiscal redistribution is significant, it is achieved mostly through transfers rather than taxes. While the priorities of pro-equity fiscal reforms vary across Latin American countries, overall the prospects for major fiscal redistribution lie mainly in raising the volume of resources available for transfers, and improving their targeting, rather than increasing the progressivity of Latin America's tax systems.

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Bibliographic Info

Article provided by Elsevier in its journal World Development.

Volume (Year): 39 (2011)
Issue (Month): 9 (September)
Pages: 1558-1569

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Handle: RePEc:eee:wdevel:v:39:y:2011:i:9:p:1558-1569

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Web page: http://www.elsevier.com/locate/worlddev

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Keywords: fiscal redistribution income inequality fiscal reform;

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References

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Citations

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Cited by:
  1. Kendrick, Neil, 2013. "Educação para todos –“free to those who can afford it”: human capital and inequality persistence in 21st c Brazil," MPRA Paper 49531, University Library of Munich, Germany.
  2. Sean Higgins, Nora Lustig, Whitney Ruble, and Timothy Smeeding, 2014. "Comparing the Incidence of Taxes and Social Spending in Brazil and the United States - Working Paper 360," Working Papers 360, Center for Global Development.
  3. Fairfield, Tasha, 2013. "Going Where the Money Is: Strategies for Taxing Economic Elites in Unequal Democracies," World Development, Elsevier, vol. 47(C), pages 42-57.
  4. Azevedo, Joao Pedro & David, Antonio C. & Bastos, Fabiano Rodrigues & Pineda, Emilio, 2014. "Fiscal adjustment and income inequality : sub-national evidence from Brazil," Policy Research Working Paper Series 6945, The World Bank.
  5. Facundo Alvaredo & Leonardo Gasparini, 2013. "Recent Trends in Inequality and Poverty in Developing Countries," CEDLAS, Working Papers 0151, CEDLAS, Universidad Nacional de La Plata.
  6. Richard M. Bird & Eric M. Zolt, 2013. "Taxation and Inequality in the Americas: Changing the Fiscal Contract?," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1315, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  7. Birdsall, Nancy & Lustig, Nora & Meyer, Christian J., 2014. "The Strugglers: The New Poor in Latin America?," World Development, Elsevier, vol. 60(C), pages 132-146.
  8. Rafael Rofman & María Laura Olivieri, 2012. "Un repaso sobre las políticas de protección social y la distribución del ingreso en Argentina," Económica, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata, vol. 0, pages 97-128, January-D.
  9. Erik Alencar de Figueiredo & Cleiton Roberto da Fonseca Silva, 2012. "Fairness and Income Redistribution- an Analysis of the Latin American Tax System," Série Textos para Discussão (Working Papers) 4, Programa de Pós-Graduação em Economia - PPGE, Universidade Federal da Paraíba.
  10. Sergei Soares & Fernando Gaiger Silveira & Claudio Hamilton dos Santos & Fábio Monteiro Vaz & André Luis Souza, 2009. "O Potencial Distributivo do Imposto de Rendapessoa Física (IRPF)," Discussion Papers 1433, Instituto de Pesquisa Econômica Aplicada - IPEA.
  11. World Bank, 2008. "Uruguay : Poverty and Social Impact Assessment of the Tax Reform," World Bank Other Operational Studies 7890, The World Bank.
  12. Leonardo Gasparini & Guillermo Cruces & Leopoldo Tornarolli & Mariana Marchionni, 2009. "A Turning Point? Recent Developments on Inequality in Latin America and the Caribbean," CEDLAS, Working Papers 0081, CEDLAS, Universidad Nacional de La Plata.
  13. Caroline-Antonia Goerl & Mike Seiferling, 2014. "Income Inequality, Fiscal Decentralization and Transfer Dependency," IMF Working Papers 14/64, International Monetary Fund.

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