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Social spending, distribution, and equality of opportunities : opportunity incidence analysis

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  • Cuesta, Jose

Abstract

Existing evidence forms a body of"conventional wisdom"on the redistributive impact of fiscal policies that has been recently questioned by more disaggregated analyses. This paper proposes an additional extension to the traditional benefit incidence analysis to explore further the extent to which the conventional wisdom holds, as well as to provide effective guidance in fiscal decision making. The benefit incidence analysis extension includes linking fiscal policies with the concept of equality of opportunities. The paper describes this approach and showcases the application of the proposed"opportunity incidence analysis"to six pilot countries: Liberia, Cote d’Ivoire, Zambia, Tajikistan, Thailand, and Paraguay. Three main contributions stand out: first, opportunity incidence analysis complements traditional benefit incidence analysis by applying its mechanics to a more forward looking concept of equal opportunity. Second, opportunities can be used to target public spending with higher precision. Third, micro-simulations can be used to understand the cost-effectiveness of alternative spending interventions that seek to improve equality of opportunities. All of these results complement the diagnosis produced by traditional incidence analysis and provide useful information to guide specific policy decisions.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 6489.

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Date of creation: 01 Jun 2013
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Handle: RePEc:wbk:wbrwps:6489

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Related research

Keywords: Access to Finance; Subnational Economic Development; Public Sector Expenditure Policy; Health Monitoring&Evaluation; Health Systems Development&Reform;

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  1. Abras, Ana & Cuesta, Jose, 2011. "Equality of opportunities, redistribution and fiscal policies : the case of Liberia," Policy Research Working Paper Series 5801, The World Bank.
  2. David Coady & Javier Arze del Granado, 2010. "The Unequal Benefits of Fuel Subsidies," IMF Working Papers 10/202, International Monetary Fund.
  3. Abras, Ana & Cuesta, Jose & Hoyos, Alejandro & Narayan, Ambar, 2012. "Equality of opportunities and fiscal incidence in Cote d'Ivoire," Policy Research Working Paper Series 6048, The World Bank.
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