Effect Of Public Expenditures On Income Distribution With Special Reference To Venezuela

Taxes as well as government expenditures tend to transform income distribution; the higher they are in relation to GDP, the higher their potential influence appears. It is easier to trace the incidence of taxes than that of expenditures and studies of effects of expenditures on income distribution are not frequent. Changes of fiscal legislation and deficiencies in reporting systems and statistics frequently found in developing countries complicate the task still further. An investigation of this type in a developing country has to face a poorly developed data base and take advantage of different and dispersed sources of information. This paper presents the methodology used for estimating the influence of government expenditures a n income distribution in the case of Venezuela. Although the incidence of fiscal activities on income distribution in Venezuela might not necessarily be the same as in other countries, Venezuelan sources of information are not very different from those existing in other countries of similar level of economic and statistical development and procedures used could appropriately be adapted to other countries.