The Distributive Impact of Fiscal Policy in Cameroon: Tax and Benefit Incidence
AbstractMost fiscal incidence studies neither analyze simultaneously the tax and benefit indicence (simply known as net fiscal incidence) nor actually relate poverty indices to fiscal impact. This paper jointly and separately examines the redistributive and poverty effects of the tax and transfer (education and health) systems in Cameroon. Broadly speaking, the tax system is generally progressive but less so when compared with the benefits of education and health. The net tax system is found to reduce inequality. Interestingly, while overall public spending on education and health are most progressive in rural areas, followed by semi-urban and urban areas, the opposite is true for tax incidence. Tax burden weighs more on the urban, followed by the rural and semi-urban, population. When we consider the two sets of policies together, they are found to mainly reflect fiscal policies in that they are more progressive and poverty-reducing when we use relative poverty lines in rural areas, followed by semi-urban and urban areas, respectively. Though we also realized a poverty-increasing effect of the net tax system using absolute poverty lines, the poverty impact still remains minimal in the rural areas where poverty is high and inequality actually increased between 1996 and 2001 than in urban areas. Overall, the current government policy can help, however, by making sure that the tax burdens of the poor are nil or very low and that the composition and direction of public expenditures on education and health favor the poor.
Download InfoIf 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.
Bibliographic InfoPaper provided by PEP-PMMA in its series Working Papers PMMA with number 2006-16.
Date of creation: 2006
Date of revision:
Contact details of provider:
Postal: Pavillon J.A. De Seve, Québec, Québec, G1V 0A6
Phone: 1-418-656-2131, ext. 2697
Web page: http://www.pep-net.org
More information through EDIRC
Fiscal policy; taxes; public expenditures; incidence; inequality; poverty; Cameroon;
Find related papers by JEL classification:
- F15 - International Economics - - Trade - - - Economic Integration
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
- H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
- H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
- I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
- I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-07-02 (All new papers)
- NEP-PBE-2006-07-02 (Public Economics)
- NEP-PUB-2006-07-02 (Public Finance)
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.:
- John Matovu & Duanjie Chen & Ritva Reinikka-Soininen, 2001. "A Quest for Revenue and Tax Incidence in Uganda," IMF Working Papers 01/24, International Monetary Fund.
- Shlomo Yitzhaki & Joel Slemrod, 1987.
"Welfare Dominance: An Application to Commodity Taxation,"
NBER Working Papers
2451, National Bureau of Economic Research, Inc.
- Yitzhaki, Shlomo & Slemrod, Joel, 1991. "Welfare Dominance: An Application to Commodity Taxation," American Economic Review, American Economic Association, vol. 81(3), pages 480-96, June.
- Creedy, J. & Lambert, P.J. & van de Ven, J., 2001.
"Close Equals and Calculation of the Vertical, Horizontal and Reranking Effects of Taxation,"
Department of Economics - Working Papers Series
781, The University of Melbourne.
- van de Ven, Justin & Creedy, John & Lambert, Peter J, 2001. " Close Equals and Calculation of the Vertical, Horizontal and Reranking Effects of Taxation," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 63(3), pages 381-94, July.
- David E. Sahn & Stephen D. Younger, 2000. "Expenditure incidence in Africa: microeconomic evidence," Fiscal Studies, Institute for Fiscal Studies, vol. 21(3), pages 329-347, September.
- Ke-young Chu & Hamid Reza Davoodi & Sanjeev Gupta, 2000. "Income Distribution and Tax and Government Social Spending Policies in Developing Countries," IMF Working Papers 00/62, International Monetary Fund.
- Gertler, Paul & Glewwe, Paul, 1990. "The willingness to pay for education in developing countries : Evidence from rural Peru," Journal of Public Economics, Elsevier, vol. 42(3), pages 251-275, August.
- Aaron, Henry & McGuire, Martin, 1970. "Public Goods and Income Distribution," Econometrica, Econometric Society, vol. 38(6), pages 907-20, November.
- Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
- Atkinson, A.B., 2000. "Increased Income Inequality in OECD Countries and the Redistributive Impact of the Government Budget," Research Paper 202, World Institute for Development Economics Research.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Johanne Perron).
If references are entirely missing, you can add them using this form.