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The Distributional Impact of Fiscal Policy in Jordan

Author

Listed:
  • Shamma A. Alam

    (Dickinson College)

  • Gabriela Inchauste

    (Poverty and Equity Global Practice at the World Bank)

  • Umar Serajuddin

    (World Bank’s Development Data Group)

Abstract

This paper analyzes the impact of Jordanian government’s fiscal policies on poverty and inequality in the country. The CEQ methodology is applied o analize all the key fiscal policies employed by the government, such as direct taxes (personal income taxes); indirect taxes (sales taxes); direct transfers; indirect subsidies (subsidies for food, oil, electricity, and water); and in-kind benefits (benefits for education and health). The results indicate that the Jordan’s policies are mostly progressive and equalizing, primarily through direct taxes, direct transfers, indirect subsidies, and in-kind benefits. Moreover, the results show that the combination of tax and expenditure policies is poverty-reducing. However, the indirect tax system, in its current form, is slightly regressive and inequality-increasing, as the poor are paying a greater fraction of their income than the rich as sales tax.

Suggested Citation

  • Shamma A. Alam & Gabriela Inchauste & Umar Serajuddin, 2017. "The Distributional Impact of Fiscal Policy in Jordan," Commitment to Equity (CEQ) Working Paper Series 44, Tulane University, Department of Economics.
    • Handle: RePEc:tul:ceqwps:44
    as

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    File URL: http://repec.tulane.edu/RePEc/ceq/ceq44.pdf
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    References listed on IDEAS

    as
    1. Aziz Atamanov & Jon Jellema & Umar Serajuddin, 2017. "Energy Subsidies Reform in Jordan: Welfare Implications of Different Scenarios," Natural Resource Management and Policy, in: Paolo Verme & Abdlekrim Araar (ed.), The Quest for Subsidy Reforms in the Middle East and North Africa Region, chapter 0, pages 179-206, Springer.
    2. Ali Enami & Nora Lustig & Rodrigo Aranda, 2016. "Analytic Foundations: Measuring the Redistributive Impact of Taxes and Transfers," Commitment to Equity (CEQ) Working Paper Series 25, Tulane University, Department of Economics.
    3. Jolliffe,Dean Mitchell & Serajuddin,Umar & Jolliffe,Dean Mitchell & Serajuddin,Umar, 2015. "Estimating poverty with panel data, comparably : an example from Jordan," Policy Research Working Paper Series 7373, The World Bank.
    4. World Bank, 2009. "Hashemite Kingdom of Jordan - Poverty Update : Main Report," World Bank Publications - Reports 3136, The World Bank Group.
    5. Mansour, Wael, 2012. "The patterns and determinants of household welfare growth in Jordan : 2002-2010," Policy Research Working Paper Series 6249, The World Bank.
    6. Joana Silva & Victoria Levin & Matteo Morgandi, 2013. "Inclusion and Resilience : The Way Forward for Social Safety Nets in the Middle East and North Africa," World Bank Publications - Books, The World Bank Group, number 14064.
    7. World Bank, 2009. "Hashemite Kingdom of Jordan - Poverty Update : Appendices," World Bank Publications - Reports 3137, The World Bank Group.
    8. Martin Ravallion, 2004. "The Debate on Globalization, Poverty and Inequality: why Measurement Matters," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 1, March.
    9. World Bank, 2012. "Hashemite Kingdom of Jordan : Options for Immediate Fiscal Adjustment and Longer Term Consolidation," World Bank Publications - Reports 13251, The World Bank Group.
    10. Andrea Brandolini & Anthony B. Atkinson, 2001. "Promise and Pitfalls in the Use of "Secondary" Data-Sets: Income Inequality in OECD Countries As a Case Study," Journal of Economic Literature, American Economic Association, vol. 39(3), pages 771-799, September.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Nora Lustig, 2019. "Measuring the Distributional Impact of Taxation and Public Spending: The Practice of Fiscal Incidence Analysis," Commitment to Equity (CEQ) Working Paper Series 24, Tulane University, Department of Economics.
    2. Jon Jellema & Nora Lustig & Astrid Haas & Sebastian Wolf, 2016. "The Impact of Taxes, Transfers, and Subsidies on Inequality and Poverty in Uganda," Commitment to Equity (CEQ) Working Paper Series 53, Tulane University, Department of Economics.
    3. Nora Lustig, 2016. "Commitment to Equity Handbook. A Guide to Estimating the Impact of Fiscal Policy on Inequality and Poverty," Commitment to Equity (CEQ) Working Paper Series 01, Tulane University, Department of Economics.
    4. Nora Lustig, 2016. "The Sustainable Development Goals, Domestic Resource Mobilization and the Poor," Commitment to Equity (CEQ) Working Paper Series 61, Tulane University, Department of Economics.
    5. Anan M. Abu Hummour, 2020. "A summative evaluation of Jordan's Poverty Reduction Strategy (PRS) 2013–2020: Case‐in‐point in socioeconomic policy," Poverty & Public Policy, John Wiley & Sons, vol. 12(4), pages 421-443, December.
    6. Hamzeh Al Amosh & Noorhayati Mansor, 2021. "Disclosure of integrated reporting elements by industrial companies: evidence from Jordan," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 25(1), pages 121-145, March.
    7. Nora Lustig, 2016. "El Impacto del Sistema Tributario y el Gasto Social en la Distribucion del Ingreso y la Pobreza en America Latina: Argentina, Bolivia, Brasil, Chile, Colombia, Costa Rica Ecuador, El Salvador, Guatema," Commitment to Equity (CEQ) Working Paper Series 37, Tulane University, Department of Economics.
    8. Joana Silva & Victoria Levin & Matteo Morgandi, 2013. "Inclusion and Resilience : The Way Forward for Social Safety Nets in the Middle East and North Africa," World Bank Publications - Books, The World Bank Group, number 14064.

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    More about this item

    Keywords

    fiscal policy; fiscal incidence; social spending; inequality; poverty; taxes; Jordan;
    All these keywords.

    JEL classification:

    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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