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A Public Finance Approach to Assessing Poverty Alleviation

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  • Shlomo Yitzhaki

Abstract

This paper points out the similarities and differences between cost-benefit analysis and tax reform. By restricting the analysis to the margin it is shown that both areas can be handled by the same method. In both areas, there is a need to define social distributional weights and to evaluate the Marginal Efficiency of Public Funds (MECF). It is suggested that the social distributional weights be derived from popular inequality indices. Such derivation, enables the decomposition of the impact of the project (tax reform) on growth and redistribution so that one can evaluate the trade-off between the two.

Suggested Citation

  • Shlomo Yitzhaki, 2001. "A Public Finance Approach to Assessing Poverty Alleviation," NBER Working Papers 8062, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:8062
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    References listed on IDEAS

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    13. Eskeland, Gunnar*Chingying Kong, 1998. "Protecting the environment and the poor - a public goods framework applied to Indonesia," Policy Research Working Paper Series 1961, The World Bank.
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    16. repec:bla:econom:v:50:y:1983:i:197:p:3-17 is not listed on IDEAS
    17. Birdsall, Nancy & Londono, Juan Luis, 1997. "Asset Inequality Matters: An Assessment of the World Bank's Approach to Poverty Reduction," American Economic Review, American Economic Association, vol. 87(2), pages 32-37, May.
    18. Yitzhaki, Shlomo, 1983. "On an Extension of the Gini Inequality Index," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 24(3), pages 617-628, October.
    19. Yitzhaki, Shlomo, 1982. "Relative deprivation and economic welfare," European Economic Review, Elsevier, vol. 17(1), pages 99-113.
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    Cited by:

    1. Wodon, Quentin & Yitzhaki, Shlomo, 2002. "Inégalité et bien-être social [Inequality and Social Welfare]," MPRA Paper 10488, University Library of Munich, Germany.
    2. Wodon, Quentin & Yitzhaki, Shlomo, 2002. "Inequality and Social Welfare," MPRA Paper 12298, University Library of Munich, Germany.
    3. Ajwad, Mohamed Ishan & Wodon, Quentin, 2002. "Who Benefits from Increased Access to Public Services at the Local Level? A Marginal Benefit Incidence Analysis for Education and Basic Infrastructure," MPRA Paper 12309, University Library of Munich, Germany.
    4. Wodon, Quentin & Yitzhaki, Shlomo, 2002. "Неравенство И Общественное Благосостояние [Inequality and Social Welfare]," MPRA Paper 10489, University Library of Munich, Germany.
    5. Wodon, Quentin & Yitzhaki, Shlomo, 2002. "Desigualdad y bienestar social [Inequality and Social Welfare]," MPRA Paper 10487, University Library of Munich, Germany.

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    More about this item

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty

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