IDEAS home Printed from https://ideas.repec.org/p/tul/wpaper/1711.html
   My bibliography  Save this paper

Measuring the Effectiveness of Taxes and Transfers in Fighting Inequality and Poverty

Author

Listed:
  • Ali Enami

    () (Department of Economics, Tulane University)

Abstract

This chapter introduces new indicators that measure the effectiveness of the elements of a fiscal system in reducing inequality and poverty. The new indices are generally divided into two families of Impact Effectiveness (IE) and Spending Effectiveness (SE) indicators and are applicable in any context (i.e. inequality and poverty). Moreover, a variation of the former, known as the Fiscal Impoverishment and Gains Effectiveness indicator (FI/FGP), is separately introduced that is only applicable in the context of poverty. IE and SE indicators are similar in the sense that they both compare the performance of a tax or transfer in reducing inequality or poverty with respect to its theoretically maximum potential. For IE indicators, we keep the amount of money raised (or spent) constant and compare the actual and potential performance of a tax (or transfer) to each other. For SE indicators, we keep the impact of a tax (or transfer) on inequality or poverty constant and compare the actual size of a tax (or transfer) with the theoretically minimum amount of tax (or transfer) that would create the same impact.

Suggested Citation

  • Ali Enami, 2017. "Measuring the Effectiveness of Taxes and Transfers in Fighting Inequality and Poverty," Working Papers 1711, Tulane University, Department of Economics.
  • Handle: RePEc:tul:wpaper:1711
    as

    Download full text from publisher

    File URL: http://repec.tulane.edu/RePEc/pdf/tul1711.pdf
    File Function: First Version, August 2017
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Fellman, Johan & Jantti, Markus & Lambert, Peter J, 1999. " Optimal Tax-Transfer Systems and Redistributive Policy," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(1), pages 115-126, March.
    2. Ali Enami, 2016. "An Application of the CEQ Effectiveness Indicators: The Case of Iran," Commitment to Equity (CEQ) Working Paper Series 58, Tulane University, Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 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.
    2. 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.
    3. Gabriela Inchauste & Nora Lustig & Mashekwa Maboshe & Catriona Purfield & Ingrid Woolard, 2015. "Distributional Impact of Fiscal Policy in South Africa," Commitment to Equity (CEQ) Working Paper Series 29, Tulane University, Department of Economics.
    4. Cabrera, Maynor & Lustig, Nora & Morán, Hilcías E., 2015. "Fiscal Policy, Inequality, and the Ethnic Divide in Guatemala," World Development, Elsevier, vol. 76(C), pages 263-279.
    5. Margarita Beneke & Nora Lustig & Jose Andres Oliva, 2016. "The Impact of Taxes and Social Spending on Inequality and Poverty in El Salvador," Commitment to Equity (CEQ) Working Paper Series 57, Tulane University, Department of Economics.
    6. Nora Lustig & Florencia Amábile & Marisa Bucheli & George Gray Molina & Sean Higgins & Miguel Jaramillo & Wilson Jiménez Pozo & Veronica Paz Arauco & Claudiney Pereira & Carola Pessino & Máximo Rossi , 2014. "El impacto del sistema tributario y del gasto social sobre la desigualdad y la pobreza en Argentina, Bolivia, Brasil, México, Perú y Uruguay: Un panorama general," Commitment to Equity (CEQ) Working Paper Series 13S, Tulane University, Department of Economics.
    7. Ali Enami, 2016. "An Application of the CEQ Effectiveness Indicators: The Case of Iran," Commitment to Equity (CEQ) Working Paper Series 58, Tulane University, Department of Economics.
    8. 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.
    9. Marisa Bucheli, 2015. "Public Transfers and Poverty Reduction: An Evaluation of Program Contribution to the Exit Rate from Poverty to Children and the Elderly," Commitment to Equity (CEQ) Working Paper Series 27, Tulane University, Department of Economics.
    10. Inchauste, Gabriela & Lustig, Nora & Maboshe, Mashekwa & Purfield, Catriona & Woolard, Ingrid, 2015. "The distributional impact of fiscal policy in South Africa," Policy Research Working Paper Series 7194, The World Bank.
    11. 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.

    More about this item

    Keywords

    Inequality; poverty; fiscal incidence; marginal contribution; effectiveness indicator;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • 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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tul:wpaper:1711. 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: (Rodrigo Aranda Balcazar). General contact details of provider: http://edirc.repec.org/data/detulus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.