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Redistributive Constraints under High Inequality: The Case of Mexico

Author

Listed:
  • John Scott

    (Division of Economics, CIDE)

Abstract

The paper presents a comprehensive analysis and interpretation of redistributive spending in Mexico. It reviews the evolution over the last two decades of the principal redistributive instruments and the distributive outcomes targeted by these instruments (income, land, education, health, nutrition). Using recent income and expenditure surveys, the paper presents a comparative benefit incidence analysis (BIA) of 25 mayor programs or spending categories covering all public spending on education, health and social security, energy and agricultural subsidies, and the principal targeted anti-poverty programs, globally representing 60% of public spending, 10% of GDP, and 15% of disposable household income. The BIA is extended over the 1992-2008 period for the principal instruments, to evaluate the distributive effects of recent policy reforms. The comparative analysis reveals large contrasts in redistributive performance (concentration coefficients), from the Oportunidades CCT program (-0.53) to agricultural, energy and public sector pension subsidies (0.40-0.80). Overall, the regressive programs cancel out the redistributive effects of the progressive efforts, leading to a regressive absolute distribution of public spending. It identifies the principal factors accounting for these results, focusing on political as well as more general structural constraints on the redistributive capacities of the State under high (pre-transfer) inequality conditions.

Suggested Citation

  • John Scott, 2008. "Redistributive Constraints under High Inequality: The Case of Mexico," Working papers DTE 441, CIDE, División de Economía.
    • Handle: RePEc:emc:wpaper:dte441
    as

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    File URL: http://www.economiamexicana.cide.edu/RePEc/emc/pdf/DTE/DTE441.pdf
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    References listed on IDEAS

    as
    1. Eddy van Doorslaer & Owen O'Donnell, 2008. "Measurement and Explanation of Inequality in Health and Health Care in Low-Income Settings," WIDER Working Paper Series DP2008-04, World Institute for Development Economic Research (UNU-WIDER).
    2. Indermit S. Gill & Truman G. Packard & Juan Yermo & Todd Pugatch, 2004. "Keeping the Promise of Old Age Income Security in Latin America," World Bank Publications - Reports 10349, The World Bank Group.
    3. Alvarez, Jesus & Moreno, Vicente Garcia & Patrinos, Harry Anthony, 2007. "Institutional effects as determinants of learning outcomes : exploring state variations in Mexico," Policy Research Working Paper Series 4286, The World Bank.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Antonio Yunez-Naude, 2012. "The effects of agricultural domestic and trade liberalization on food security: Lessons from Mexico," Serie documentos de trabajo del Centro de Estudios Económicos 2012-01, El Colegio de México, Centro de Estudios Económicos.
    2. Florencia Torche & Luis F. Lopez-Calva, 2013. "Stability and Vulnerability of the Latin American Middle Class," Oxford Development Studies, Taylor & Francis Journals, vol. 41(4), pages 409-435, December.
    3. Florencia Torche & Luis F. Lopez-Calva, 2013. "Stability and Vulnerability of the Latin American Middle Class," Oxford Development Studies, Taylor & Francis Journals, vol. 41(4), pages 409-435, December.
    4. Raymundo Campos & Gerardo Esquivel & Nora Lustig, 2012. "The Rise and Fall of Income Inequality in Mexico, 1989–2010," Working Papers 267, ECINEQ, Society for the Study of Economic Inequality.
    5. Vladimir Hlasny, 2019. "Redistributive Impacts of Fiscal Policies in Mexico: Corrections for Top Income Measurement Problems," LIS Working papers 765, LIS Cross-National Data Center in Luxembourg.
    6. repec:unu:wpaper:wp2012-10 is not listed on IDEAS
    7. Charles-Coll, Jorge A., 2010. "The optimal rate of inequality: A framework for the relationship between income inequality and economic growth," MPRA Paper 28921, University Library of Munich, Germany.
    8. repec:unu:wpaper:wp2012-98 is not listed on IDEAS

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    More about this item

    Keywords

    redistributive spending; Mexico; comparative benefit incidence analysis;
    All these keywords.

    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health

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