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Fiscal policy, inequality, and the poor in the developing world

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  • Nora Lustig

Abstract

NOTE | Revised version August 2017 available. View and download the revised version . Using comparable fiscal incidence analysis, this paper examines the impact of fiscal policy on inequality and poverty in 25 countries for around 2010. Success in fiscal redistribution is driven primarily by redistributive effort (share of social spending to GDP in each country) and the extent to which transfers/subsidies are targeted at the poor and direct taxes targeted at the rich. While fiscal policy always reduces inequality, this is not the case with poverty.

Suggested Citation

  • Nora Lustig, 2016. "Fiscal policy, inequality, and the poor in the developing world," WIDER Working Paper Series wp-2016-164, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2016-164
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    File URL: https://www.wider.unu.edu/sites/default/files/wp2016-164_0.pdf
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    References listed on IDEAS

    as
    1. Marisa Bucheli & Nora Lustig & Máximo Rossi & Florencia Amábile, 2014. "Social Spending, Taxes, and Income Redistribution in Uruguay," Public Finance Review, , vol. 42(3), pages 413-433, May.
    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 1326, Tulane University, Department of Economics.
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    Full references (including those not matched with items on IDEAS)

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Fiscal Policy, Inequality and the Poor in the Developing World
      by maximorossi in NEP-LTV blog on 2016-10-19 19:25:05

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    Cited by:

    1. Gautam Negi, 2021. "Fiscal Impulse And Sectoral Output €“ Evidence From Indian States," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 28, pages 151-167, December.
    2. Georgeta Vidican Auktor & Markus Loewe, 2022. "Subsidy Reform and the Transformation of Social Contracts: The Cases of Egypt, Iran and Morocco," Social Sciences, MDPI, vol. 11(2), pages 1-22, February.
    3. Hyojung Kang & Jorge Martinez‐Vazquez, 2022. "When does foreign direct investment lead to inclusive growth?," The World Economy, Wiley Blackwell, vol. 45(8), pages 2394-2427, August.
    4. Markina Oksana, 2022. "Taxation, Inequality, and Poverty: Evidence from Ukraine," Central European Economic Journal, Sciendo, vol. 9(56), pages 1-18, January.
    5. Meng Cai & Jing Xu, 2022. "Evaluating the Redistributive Effect of Social Security Programs in China over the Past 30 Years," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 30(1), pages 58-81, January.
    6. Sèna Kimm Gnangnon, 2021. "Exchange rate pressure, fiscal redistribution and poverty in developing countries," Economic Change and Restructuring, Springer, vol. 54(4), pages 1173-1203, November.
    7. Jon Jellema & Matthew Wai-Poi & Rythia Afkar, 2017. "The Distributional Impact of Fiscal Policy in Indonesia," Commitment to Equity (CEQ) Working Paper Series 40, Tulane University, Department of Economics.
    8. Haydeeliz Carrasco & Hamidou Jawara & Moritz Meyer, 2022. "The Effects Of Fiscal Policy On Inequality And Poverty In The Gambia," Commitment to Equity (CEQ) Working Paper Series 117, Tulane University, Department of Economics.
    9. Bargain, Olivier & Jara Tamayo, Holguer Xavier & Magejo, Prudence & Benhura, Miracle, 2018. "Learning from the," IZA Discussion Papers 12017, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    Fiscal incidence; Social spending; Inequality; Poverty;
    All these keywords.

    JEL classification:

    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty

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