Advanced Search
MyIDEAS: Login to save this paper or follow this series

The impact of taxes and social spending on inequality and poverty in Argentina, Bolivia, Brazil, Mexico, Peru and Uruguay: An overview

Contents:

Author Info

  • Nora Lustig

    (Tulane University and Center for Global Development and Inter-American Dialogue.)

  • Florencia Amábile

    (Affilitation available at www.commitmentoequity.org)

  • Marisa Bucheli

    (Affilitation available at www.commitmentoequity.org)

  • George Gray Molina

    (Affilitation available at www.commitmentoequity.org)

  • Sean Higgins

    (Affilitation available at www.commitmentoequity.org)

  • Miguel Jaramillo

    (Affilitation available at www.commitmentoequity.org)

  • Wilson Jiménez Pozo

    (Affilitation available at www.commitmentoequity.org)

  • Veronica Paz Arauco

    (Affilitation available at www.commitmentoequity.org)

  • Claudiney Pereira

    (Affilitation available at www.commitmentoequity.org)

  • Carola Pessino

    (Affilitation available at www.commitmentoequity.org)

  • Máximo Rossi

    (Affilitation available at www.commitmentoequity.org)

  • John Scott

    (Affilitation available at www.commitmentoequity.org)

  • Ernesto Yáñez Aguilar

    (Affilitation available at www.commitmentoequity.org)

Abstract

How much redistribution and poverty reduction is being accomplished in Latin America through social spending, subsidies, and taxes? Standard fiscal incidence analyses applied to Argentina, Bolivia, Brazil, Mexico, Peru, and Uruguay using a comparable methodology yields the following results. Direct taxes and cash transfers reduce inequality and poverty by nontrivial amounts in Argentina, Brazil, and Uruguay but less so in Bolivia, Mexico, and Peru. While direct taxes are progressive, the redistributive impact is small because direct taxes as a share of GDP are generally low. Cash transfers are quite progressive in absolute terms, except in Bolivia where programs are not targeted to the poor. In Bolivia and Brazil, indirect taxes more than offset the poverty-reducing impact of cash transfers. When one includes the in-kind transfers in education and health, valued at government costs, they reduce inequality in all countries by considerably more than cash transfers, reflecting their relative size.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.ecineq.org/milano/WP/ECINEQ2013-315.pdf
Download Restriction: no

Bibliographic Info

Paper provided by ECINEQ, Society for the Study of Economic Inequality in its series Working Papers with number 315.

as in new window
Length: 30 pages
Date of creation: Nov 2013
Date of revision:
Handle: RePEc:inq:inqwps:ecineq2013-315

Contact details of provider:
Email:
Web page: http://www.ecineq.org
More information through EDIRC

Related research

Keywords: fiscal incidence; inequality; poverty; taxes; social spending; Latin America.;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Marisa Bucheli & Nora Lustig & Maximo Rossi & Florencia Amabile, 2012. "Social Spending, Taxes and Income Redistribution in Uruguay," Working Papers, Tulane University, Department of Economics 1217, Tulane University, Department of Economics.
  2. Herwig Immervoll & Horacio Levy & José Ricardo Nogueira & Cathal O´Donoghue & Rozane Bezerra de Siqueira, 2005. "The Impact of Brazil´s Tax-Benefit System on Inequality and Poverty," Ibero America Institute for Econ. Research (IAI) Discussion Papers, Ibero-America Institute for Economic Research 117, Ibero-America Institute for Economic Research.
  3. Nora Lustig & Carola Pessino & John Scott, 2013. "The Impact of Taxes and Social Spending on Inequality and Poverty in Argentina, Bolivia, Brazil, Mexico, Peru and Uruguay: An Overview," Working Papers, Tulane University, Department of Economics 1313, Tulane University, Department of Economics.
  4. Blanca Moreno-Dodson & Quentin Wodon, 2008. "Public Finance for Poverty Reduction : Concepts and Case Studies from Africa and Latin America," World Bank Publications, The World Bank, number 6881, August.
  5. Sean Higgins & Nora Lustig & Julio Ramirez & Billy Swanson, 2013. "Social Spending, Taxes and Income Redistribution in Paraguay," Working Papers, Tulane University, Department of Economics 1311, Tulane University, Department of Economics.
  6. Lustig, Nora & Lopez-Calva, Luis F. & Ortiz-Juarez, Eduardo, 2013. "Declining Inequality in Latin America in the 2000s: The Cases of Argentina, Brazil, and Mexico," World Development, Elsevier, Elsevier, vol. 44(C), pages 129-141.
  7. Owen O'Donnell & Eddy van Doorslaer & Adam Wagstaff & Magnus Lindelow, 2008. "Analyzing Health Equity Using Household Survey Data : A Guide to Techniques and Their Implementation," World Bank Publications, The World Bank, number 6896, August.
  8. Francisco H.G. Ferreira & Julian Messina & Jamele Rigolini & Luis-Felipe López-Calva & Maria Ana Lugo & Renos Vakis, 2013. "Economic Mobility and the Rise of the Latin American Middle Class," World Bank Publications, The World Bank, number 11858, August.
  9. Nora Lustig & Carola Pessino, 2013. "Social Spending and Income Redistribution in Argentina during the 2000s: The Rising Role of Noncontributory Pensions," Commitment to Equity (CEQ) Working Paper Series, Tulane University, Department of Economics 1305, Tulane University, Department of Economics.
  10. Nora Lustig & George Gray Molina & Sean Higgins & Miguel Jaramillo & Wilson Jimenez & Veronica Paz & Claudiney Pereira & Carola Pessino & John Scott & Ernesto Yanez, 2012. "The Impact of Taxes and Social Spending on Inequality and Poverty in Argentina, Bolivia, Brazil, Mexico and Peru: A Synthesis of Results," Working Papers, Tulane University, Department of Economics 1216, Tulane University, Department of Economics.
  11. Kakwani, Nanok C, 1977. "Measurement of Tax Progressivity: An International Comparison," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 87(345), pages 71-80, March.
  12. Nora Lustig & Sean Higgins, 2012. "Commitment to Equity Assessment (CEQ): Estimating the Incidence of Social Spending, Subsidies and Taxes Handbook," Working Papers, Tulane University, Department of Economics 1219, Tulane University, Department of Economics.
  13. Karla Breceda & Jamele Rigolini & Jaime Saavedra, 2009. "Latin America and the Social Contract: Patterns of Social Spending and Taxation," Population and Development Review, The Population Council, Inc., The Population Council, Inc., vol. 35(4), pages 721-748.
  14. Adam Wagstaff, 2012. "Benefit‐incidence analysis: are government health expenditures more pro‐rich than we think?," Health Economics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 21(4), pages 351-366, 04.
  15. Jorge Martinez-Vazquez, 2001. "The Impact of Budgets on the Poor: Tax and Benefit," International Center for Public Policy Working Paper Series, at AYSPS, GSU, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University paper0110, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Marisa Bucheli & Nora Lustig & Máximo Rossi & Florencia Amábile, 2014. "Social Spending, Taxes, and Income Redistribution in Uruguay," Public Finance Review, , , vol. 42(3), pages 413-433, May.
  2. Nora Lustig & Carola Pessino, 2012. "Social Spending and Income Redistribution in Argentina During the 2000s: the Rising Role of Noncontributory Pensions," CEMA Working Papers: Serie Documentos de Trabajo., Universidad del CEMA 499, Universidad del CEMA.
  3. Arjan de Haan, 2013. "Why Emerging Economies Need Social Policy: the Cases of China and India," One Pager, International Policy Centre for Inclusive Growth 201, International Policy Centre for Inclusive Growth.
  4. Sean Higgins & Nora Lustig & Whitney Ruble & Timothy Smeeding, 2013. "Comparing the Incidence of Taxes and Social Spending in Brazil and the United States," Working Papers, Tulane University, Department of Economics 1317, Tulane University, Department of Economics.
  5. Nancy Birdsall, Nora Lustig, Christian Meyer, 2013. "The Strugglers: The New Poor in Latin America?-Working Paper 337," Working Papers, Center for Global Development 337, Center for Global Development.
  6. Nora Lustig & Carola Pessino & John Scott, 2013. "The Impact of Taxes and Social Spending on Inequality and Poverty in Argentina, Bolivia, Brazil, Mexico, Peru and Uruguay: An Overview," Working Papers, Tulane University, Department of Economics 1313, Tulane University, Department of Economics.
  7. Arjan de Haan, 2013. "The Social Policies of Emerging Economies: Growth and Welfare in China and India," Working Papers, International Policy Centre for Inclusive Growth 110, International Policy Centre for Inclusive Growth.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:inq:inqwps:ecineq2013-315. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Maria Ana Lugo).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.