Fiscal Space and Public Spending on Children in Burkina Faso
Despite high growth rates in recent decades, Burkina Faso is still a poor country. The government acknowledges the need for a stronger commitment to reach the Millennium Development Goals (MDGs), particularly regarding the reduction of poverty. At the same time, the Burkinabe budget deficit has grown in recent years in response to various crises which have hit the country. There are strong pressures to rapidly reduce this budget deficit, but there are active concerns about how this will be achieved. The country thus faces difficult choices: how to ensure better living conditions for children, attain the millennium goals and ensure they have a better future in the present budgetary context? To answer this question, three policy interventions were identified: (i) an increase in education spending, (ii) a school fees subsidy and (iii) a cash transfer to households with children under the age of five. The same total amount is injected into the economy in each of the three cases, facilitating comparison between the three scenarios. The discussions also made it possible to identify the three financing mechanisms that appear most realistic: (i) a reduction in subsidies, (ii) an increase in the indirect tax collection rate and (iii) an extension of the timeframe to reduce the public deficit to ten years rather than five. The results indicate that increased public education spending helps raise school participation and pass rates, thus increasing the supply and education level of skilled workers, leading to a reduced incidence and depth of both monetary and caloric poverty. School fees subsidies have more differentiated effects on education: they promote children’s entry into school to a greater degree, but are less effective at inducing them to pursue their studies. Finally, the supply of skilled workers increases slightly, but their average level of education is lower than in the reference scenario. This type of intervention has a beneficial impact on poverty, greater than under increased public education spending. Cash transfers have a limited impact on educational behaviour, and thus on the supply of skilled workers, but substantially reduce the incidence and depth of poverty. The results are qualitatively similar under each financing approach. In sum, if the objective is to achieve improved education and economic performance, the best intervention appears to be to focus on increased public education spending. However, if reducing child poverty is prioritized, it is cash transfers to families that appear more suitable. Regardless of the intervention considered, the most suitable financing mechanism appears to be a temporary increase in the public deficit, because it is accompanied by a smaller negative effect on the quality of life of the most destitute.
|Date of creation:||2013|
|Date of revision:|
|Contact details of provider:|| Postal: CP 8888, succursale Centre-Ville, Montréal, QC H3C 3P8|
Phone: (514) 987-8161
Web page: http://www.cirpee.org/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- François Bourguignon & Anne-Sophie Robilliard & Sherman Robinson, 2003.
"Representative versus real households in the macro-economic modeling of inequality,"
DELTA Working Papers
2003-05, DELTA (Ecole normale supérieure).
- François Bourguignon & Anne-Sophie Robilliard & Sherman Robinson, 2003. "Representative versus real households in the macro-economic modeling of inequality," Working Papers DT/2003/10, DIAL (Développement, Institutions et Mondialisation).
- John J Matovu & Duanjie Chen & Ritva Reinikka-Soininen, 2001. "A Quest for Revenue and Tax Incidence in Uganda," IMF Working Papers 01/24, International Monetary Fund.
- Yitzhaki, Shlomo & Slemrod, Joel, 1991.
"Welfare Dominance: An Application to Commodity Taxation,"
American Economic Review,
American Economic Association, vol. 81(3), pages 480-96, June.
- Shlomo Yitzhaki & Joel Slemrod, 1987. "Welfare Dominance: An Application to Commodity Taxation," NBER Working Papers 2451, National Bureau of Economic Research, Inc.
- Alderman, Harold & del Ninno, Carlo, 1999. "Poverty Issues for Zero Rating VAT in South Africa," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 8(2), pages 182-208, July.
- Decaluwé, Bernard & Dumont, Jean-Christophe & Savard, Luc, 2000. "Measuring Poverty and Inequality in a Computable General Equilibrium Model," Cahiers de recherche 9926, Université Laval - Département d'économique.
- Denis Cogneau & Anne-Sophie Robilliard, 2004. "Poverty Alleviation Policies in Madagascar: a Micro-Macro Simulation Model," Working Papers DT/2004/11, DIAL (Développement, Institutions et Mondialisation), revised Nov 2004.
- Mayshar, Joram & Yitzhaki, Shlomo, 1996. "Dalton-improving tax reform: When households differ in ability and needs," Journal of Public Economics, Elsevier, vol. 62(3), pages 399-412, November.
- Luc Savard, 2004. "Un système de demandes AIDS dans un contexte EGC microsimulation pour l'analyse de pauvreté et des inégalités," Cahiers de recherche 04-10, Departement d'Economique de la Faculte d'administration à l'Universite de Sherbrooke.
- Cogneau, Denis & Robilliard, Anne-Sophie, 2000. "Growth, distribution and poverty in Madagascar," TMD discussion papers 61, International Food Policy Research Institute (IFPRI).
- Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-26, June.
- Sami Bibi & John Cockburn & Massa Coulibaly & Luca Tiberti, 2009. "The Impact of the Increase in Food Prices on Child Poverty and the Policy Response in Mali," Papers inwopa09/66, Innocenti Working Papers.
- Glewwe, P., 1990.
"Investigating The Determinants Of Household Welfare In Cote D'Ivoire,"
71, World Bank - Living Standards Measurement.
- Glewwe, Paul, 1991. "Investigating the determinants of household welfare in Cote d'Ivoire," Journal of Development Economics, Elsevier, vol. 35(2), pages 307-337, April.
- Ahmad, Ehtisham & Stern, Nicholas, 1984. "The theory of reform and indian indirect taxes," Journal of Public Economics, Elsevier, vol. 25(3), pages 259-298, December.
- John Cockburn & Luca Tiberti & Ismaël Fofana & Lacina Balma & Samuel Kaboré, 2010. "Simulation des effets de la crise économique et des politiques de reponse sur les enfants en Afrique de l'Ouest et du Centre: le cas du Burkina Faso," Papers inwopa599, Innocenti Working Papers.
- Makdissi, Paul & Wodon, Quentin, 2002. "Consumption dominance curves: testing for the impact of indirect tax reforms on poverty," Economics Letters, Elsevier, vol. 75(2), pages 227-235, April.
When requesting a correction, please mention this item's handle: RePEc:lvl:lacicr:1308. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Manuel Paradis)
If references are entirely missing, you can add them using this form.