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Fiscal Policy and Ethno-Racial Inequality in Bolivia, Brazil, Guatemala and Uruguay

Author

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  • Nora Lustig

    () (Stone Center for Latin American Studies, Department of Economics, Tulane University, Commitment to Equity Institute (CEQI).)

Abstract

African descendants and indigenous peoples in Latin America face higher poverty rates and are disproportionately represented among the poor. Per capita income of the white population can be sixty percent higher to twice as high as the per capita income of the African descendant and indigenous populations. Using comparable fiscal incidence analyses for Bolivia, Brazil, Guatemala and Uruguay, I analyze how much poverty and inequality change after fiscal interventions. I also propose a set of indicators for measuring how progressive and pro-indigenous or pro-African descendant government intervention is in ethno-racial dimensions. Based on these indicators, I explore which elements of tax and transfer systems within each country specifically contribute to narrowing or increasing existing ethno-racial gaps. The ratio of average per capita incomes by ethnicity or race declines by at most one decimal point (Bolivia, Brazil and Uruguay) to nothing (Guatemala). In Brazil and Uruguay, where there is a respectable decline in overall inequality, the decline in inequality between different ethno-racial groups still does not decline significantly, changing by a very small amount in Uruguay and actually increasing in Brazil.

Suggested Citation

  • Nora Lustig, 2015. "Fiscal Policy and Ethno-Racial Inequality in Bolivia, Brazil, Guatemala and Uruguay," Commitment to Equity (CEQ) Working Paper Series 22, Tulane University, Department of Economics.
  • Handle: RePEc:tul:ceqwps:22
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    File URL: http://repec.tulane.edu/RePEc/ceq/ceq22.pdf
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    References listed on IDEAS

    as
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    Cited by:

    1. Margarita Beneke & Nora Lustig, 2015. "El Impacto de los Impuestos y el Gasto Social en la Desigualdad y la Pobreza en El Salvador," Commitment to Equity (CEQ) Working Paper Series 26, Tulane University, Department of Economics.
    2. Higgins, Sean & Lustig, Nora, 2016. "Can a poverty-reducing and progressive tax and transfer system hurt the poor?," Journal of Development Economics, Elsevier, vol. 122(C), pages 63-75.
    3. Nora Lustig, 2015. "The Redistributive Impactive of Government Spending on Education and Health Evidence from Thirteen Developing Countries in the Commitment to Equity Project," Commitment to Equity (CEQ) Working Paper Series 30, Tulane University, Department of Economics.
    4. Marisa Bucheli, 2014. "Public Transfers and Poverty Reduction: an Evaluation of Program Contribution to the Exit Rate from Poverty of Children and the Elderly," Documentos de Trabajo (working papers) 0914, Department of Economics - dECON.

    More about this item

    Keywords

    fiscal incidence; inequality; poverty; taxes; social spending; race; ethnicity; Latin America;

    JEL classification:

    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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