IDEAS home Printed from https://ideas.repec.org/p/tul/ceqwps/44.html
   My bibliography  Save this paper

The Distributional Impact of Fiscal Policy in Jordan

Author

Listed:
  • Shamma A. Alam

    (Dickinson College)

  • Gabriela Inchauste

    (Poverty and Equity Global Practice at the World Bank)

  • Umar Serajuddin

    (World Bank’s Development Data Group)

Abstract

This paper analyzes the impact of Jordanian government’s fiscal policies on poverty and inequality in the country. The CEQ methodology is applied o analize all the key fiscal policies employed by the government, such as direct taxes (personal income taxes); indirect taxes (sales taxes); direct transfers; indirect subsidies (subsidies for food, oil, electricity, and water); and in-kind benefits (benefits for education and health). The results indicate that the Jordan’s policies are mostly progressive and equalizing, primarily through direct taxes, direct transfers, indirect subsidies, and in-kind benefits. Moreover, the results show that the combination of tax and expenditure policies is poverty-reducing. However, the indirect tax system, in its current form, is slightly regressive and inequality-increasing, as the poor are paying a greater fraction of their income than the rich as sales tax.

Suggested Citation

  • Shamma A. Alam & Gabriela Inchauste & Umar Serajuddin, 2017. "The Distributional Impact of Fiscal Policy in Jordan," Commitment to Equity (CEQ) Working Paper Series 44, Tulane University, Department of Economics.
    • Handle: RePEc:tul:ceqwps:44
    as

    Download full text from publisher

    File URL: http://repec.tulane.edu/RePEc/ceq/ceq44.pdf
    File Function: First version, 2017
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Aziz Atamanov & Jon Jellema & Umar Serajuddin, 2017. "Energy Subsidies Reform in Jordan: Welfare Implications of Different Scenarios," Natural Resource Management and Policy, in: Paolo Verme & Abdlekrim Araar (ed.), The Quest for Subsidy Reforms in the Middle East and North Africa Region, chapter 0, pages 179-206, Springer.
    2. Ali Enami & Nora Lustig & Rodrigo Aranda, 2016. "Analytic Foundations: Measuring the Redistributive Impact of Taxes and Transfers," Commitment to Equity (CEQ) Working Paper Series 25, Tulane University, Department of Economics.
    3. Jolliffe,Dean Mitchell & Serajuddin,Umar & Jolliffe,Dean Mitchell & Serajuddin,Umar, 2015. "Estimating poverty with panel data, comparably : an example from Jordan," Policy Research Working Paper Series 7373, The World Bank.
    4. World Bank, 2009. "Hashemite Kingdom of Jordan - Poverty Update : Main Report," World Bank Publications - Reports 3136, The World Bank Group.
    5. Mansour, Wael, 2012. "The patterns and determinants of household welfare growth in Jordan : 2002-2010," Policy Research Working Paper Series 6249, The World Bank.
    6. Joana Silva & Victoria Levin & Matteo Morgandi, 2013. "Inclusion and Resilience : The Way Forward for Social Safety Nets in the Middle East and North Africa," World Bank Publications - Books, The World Bank Group, number 14064, December.
    7. World Bank, 2009. "Hashemite Kingdom of Jordan - Poverty Update : Appendices," World Bank Publications - Reports 3137, The World Bank Group.
    8. Martin Ravallion, 2004. "The Debate on Globalization, Poverty and Inequality: why Measurement Matters," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 1, March.
    9. World Bank, 2012. "Hashemite Kingdom of Jordan : Options for Immediate Fiscal Adjustment and Longer Term Consolidation," World Bank Publications - Reports 13251, The World Bank Group.
    10. Andrea Brandolini & Anthony B. Atkinson, 2001. "Promise and Pitfalls in the Use of "Secondary" Data-Sets: Income Inequality in OECD Countries As a Case Study," Journal of Economic Literature, American Economic Association, vol. 39(3), pages 771-799, September.
    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


    Cited by:

    1. Nora Lustig, 2019. "Measuring the Distributional Impact of Taxation and Public Spending: The Practice of Fiscal Incidence Analysis," Commitment to Equity (CEQ) Working Paper Series 24, Tulane University, Department of Economics.
    2. Jon Jellema & Nora Lustig & Astrid Haas & Sebastian Wolf, 2016. "The Impact of Taxes, Transfers, and Subsidies on Inequality and Poverty in Uganda," Commitment to Equity (CEQ) Working Paper Series 53, Tulane University, Department of Economics.
    3. Hamzeh Al Amosh & Noorhayati Mansor, 2021. "Disclosure of integrated reporting elements by industrial companies: evidence from Jordan," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 25(1), pages 121-145, March.
    4. Nora Lustig, 2016. "The Sustainable Development Goals, Domestic Resource Mobilization and the Poor," Commitment to Equity (CEQ) Working Paper Series 61, Tulane University, Department of Economics.
    5. Nora Lustig, 2016. "El Impacto del Sistema Tributario y el Gasto Social en la Distribucion del Ingreso y la Pobreza en America Latina: Argentina, Bolivia, Brasil, Chile, Colombia, Costa Rica Ecuador, El Salvador, Guatema," Commitment to Equity (CEQ) Working Paper Series 37, Tulane University, Department of Economics.
    6. Nora Lustig, 2016. "Commitment to Equity Handbook. A Guide to Estimating the Impact of Fiscal Policy on Inequality and Poverty," Commitment to Equity (CEQ) Working Paper Series 01, Tulane University, Department of Economics.
    7. Anan M. Abu Hummour, 2020. "A summative evaluation of Jordan's Poverty Reduction Strategy (PRS) 2013–2020: Case‐in‐point in socioeconomic policy," Poverty & Public Policy, John Wiley & Sons, vol. 12(4), pages 421-443, December.
    8. Joana Silva & Victoria Levin & Matteo Morgandi, 2013. "Inclusion and Resilience : The Way Forward for Social Safety Nets in the Middle East and North Africa," World Bank Publications - Books, The World Bank Group, number 14064, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jolliffe,Dean Mitchell & Serajuddin,Umar & Jolliffe,Dean Mitchell & Serajuddin,Umar, 2015. "Estimating poverty with panel data, comparably : an example from Jordan," Policy Research Working Paper Series 7373, The World Bank.
    2. Aziz Atamanov & Jon Jellema & Umar Serajuddin, 2017. "Energy Subsidies Reform in Jordan: Welfare Implications of Different Scenarios," Natural Resource Management and Policy, in: Paolo Verme & Abdlekrim Araar (ed.), The Quest for Subsidy Reforms in the Middle East and North Africa Region, chapter 0, pages 179-206, Springer.
    3. Atamanov Aziz & Jon Jellema & Umar Serajuddin, 2015. "Energy Subsidies Reform in Jordan," World Bank Publications - Reports 22051, The World Bank Group.
    4. Sameh Asim Ajlouni & Moh'd Taleb Alodat, 2021. "Gaussian Process Regression for Forecasting Gasoline Prices in Jordan," International Journal of Energy Economics and Policy, Econjournals, vol. 11(3), pages 502-509.
    5. Silva,Joana C. G. & Morgandi,Matteo & Levin,Victoria, 2016. "Trust in government and support for redistribution," Policy Research Working Paper Series 7675, The World Bank.
    6. Hassine, Nadia Belhaj, 2014. "Economic inequality in the Arab region," Policy Research Working Paper Series 6911, The World Bank.
    7. Gabriela Inchauste & David G. Victor, 2017. "The Political Economy of Energy Subsidy Reform," World Bank Publications - Books, The World Bank Group, number 26216, December.
    8. Thierry Verdier, 2005. "Intégration commerciale « socialement responsable » : une approche en termes d'économie politique," Revue d’économie du développement, De Boeck Université, vol. 13(4), pages 55-121.
    9. Racha Ramadan & Vladimir Hlasny & Vito Intini, 2018. "Inter‐Group Expenditure Gaps In The Arab Region And Their Determinants: Application To Egypt, Jordan, Palestine And Tunisia," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 64(s1), pages 145-188, October.
    10. Cousins, Mel, 2012. "Jordan: social protection in a low employment state," MPRA Paper 56394, University Library of Munich, Germany.
    11. Alam, Shamma Adeeb, 2015. "Parental health shocks, child labor and educational outcomes: Evidence from Tanzania," Journal of Health Economics, Elsevier, vol. 44(C), pages 161-175.
    12. Elizabeth Jane Casabianca, 2012. "Distributional effects of preferential and multilateral trade liberalization: the case of Paraguay," FIW Working Paper series 083, FIW.
    13. Alvaredo, Facundo & Bourguignon, François & Ferreira, Francisco H. G. & Lustig, Nora, 2023. "Seventy-Five Years of Measuring Income Inequality in Latin America," SocArXiv 7ckzg, Center for Open Science.
    14. Lane Kenworthy, 2004. "Welfare States, Real Income and Poverty," LIS Working papers 370, LIS Cross-National Data Center in Luxembourg.
    15. Clements, Tom & Suon, Seng & Wilkie, David S. & Milner-Gulland, E.J., 2014. "Impacts of Protected Areas on Local Livelihoods in Cambodia," World Development, Elsevier, vol. 64(S1), pages 125-134.
    16. Daniele Checchi & Cecilia García‐Peñalosa, 2010. "Labour Market Institutions and the Personal Distribution of Income in the OECD," Economica, London School of Economics and Political Science, vol. 77(307), pages 413-450, July.
    17. Burkhauser, Richard V. & Larrimore, Jeff & Simon, Kosali I., 2012. "A "Second Opinion" on the Economic Health of the American Middle Class," National Tax Journal, National Tax Association;National Tax Journal, vol. 65(1), pages 7-32, March.
    18. Jung, Samuel Moon & Vijverberg, Chu-Ping C., 2019. "Financial development and income inequality in China – A spatial data analysis," The North American Journal of Economics and Finance, Elsevier, vol. 48(C), pages 295-320.
    19. Sanjay Reddy & Rahul Lahoti & Arjun Jayadev, 2015. "The global consumption and income project: An introduction and preliminary findings," WIDER Working Paper Series 003, World Institute for Development Economic Research (UNU-WIDER).
    20. Thomas Piketty & Gilles Postel-Vinay & Jean-Laurent Rosenthal, 2006. "Wealth Concentration in a Developing Economy: Paris and France, 1807–1994," American Economic Review, American Economic Association, vol. 96(1), pages 236-256, March.

    More about this item

    Keywords

    fiscal policy; fiscal incidence; social spending; inequality; poverty; taxes; Jordan;
    All these keywords.

    JEL classification:

    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tul:ceqwps:44. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Nora Lustig (email available below). General contact details of provider: https://edirc.repec.org/data/detulus.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.