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The Distributional Impact of Fiscal Policy in Honduras

Author

Listed:
  • David Locke Newhouse
  • Irene Yackovlev
  • Mr. Robert Gillingham

Abstract

This paper uses household survey data to estimate the incidence of tax and spending programs in Honduras. Any such exercise is fraught with difficulty, so our simplifying assumptions are carefully explained. Rather than look at tax and spending completely independently, we evaluate net incidence of major programs-such as health care and pensions-to get a more holistic evaluation of redistribution. Our results show that fiscal policy is, on balance, progressive, but that there is room for significant improvement. In particular, energy subsidies, university education and public pension programs provide disproportionate benefits to higher-income households.

Suggested Citation

  • David Locke Newhouse & Irene Yackovlev & Mr. Robert Gillingham, 2008. "The Distributional Impact of Fiscal Policy in Honduras," IMF Working Papers 2008/168, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2008/168
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    References listed on IDEAS

    as
    1. Arulampalam, Wiji & Devereux, Michael P. & Maffini, Giorgia, 2012. "The direct incidence of corporate income tax on wages," European Economic Review, Elsevier, vol. 56(6), pages 1038-1054.
    2. Alan J. Auerbach, 2006. "Who Bears the Corporate Tax? A Review of What We Know," NBER Chapters, in: Tax Policy and the Economy, Volume 20, pages 1-40, National Bureau of Economic Research, Inc.
    3. William C. Randolph, 2006. "International Burdens of the Corporate Income Tax: Working Paper 2006-09," Working Papers 18067, Congressional Budget Office.
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    Cited by:

    1. Guillermo Cruces & Gary S. Fields & David Jaume & Mariana Viollaz, 2015. "The growth-employment-poverty nexus in Latin America in the 2000s: Honduras country study," WIDER Working Paper Series wp-2015-078, World Institute for Development Economic Research (UNU-WIDER).
    2. Robert Gillingham, 2014. "Fiscal Policy for Health Policy Makers," Health, Nutrition and Population (HNP) Discussion Paper Series 87981, The World Bank.
    3. Rodrigo Cubero & Ivanna Vladkova Hollar, 2010. "Equity and Fiscal Policy: The Income Distribution Effects of Taxation and Social Spending in Central America," IMF Working Papers 2010/112, International Monetary Fund.

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