Distributional Impacts of Taxes and Benefits in Post-Soviet Countries

This study compares the distributional impacts of the main tax and social spendingprograms in eight countries of the former Soviet Union (Armenia, Belarus, Georgia, Kyrgyzstan, Moldova, the RussianFederation, Tajikistan, and Ukraine) by applying a state-of-the-art fiscal incidence analysis based on theCommitment to Equity methodology. The region is highly interesting due to a unique combination of strong elementsof path dependency (socialist legacies) with radical liberalization and welfare state retrenchment. The studyexamines the actual outcomes in terms of inequality and poverty and assesses the extent to which these outcomes canbe attributed to various welfare state policies in these countries. It examines the extent to which taxes and socialspending are progressive (whether the average transfer declines with income) and equalizing (whether they reduceinequality). In contrast to the majority of fiscal incidence studies, which are typically limited to the assessment ofthe impact of direct taxes and transfers, the study estimates the cumulative impact of the tax-benefit system asa whole, including direct and indirect taxes, cash transfers, and transfers in kind such as public educationand health care.