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Fiscal Incidence on the Island: Grenada’s Fiscal System and Its Incidence

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Listed:
  • Pozo,Wilson Jimenez
  • Ibarra,Silvia Granados
  • Ran Li
  • Gustavo Javier Canavire Bacarreza
  • Gómez Aliaga,Guillermo
  • Britton,Chevanne
  • Rios-Avila,Fernando

Abstract

This paper examines the distributional effects of fiscal policy in Grenada. Using data from the 2017–18 Living Conditions and Household Budgets Survey and following the Commitment to Equity analysis framework, the paper estimates the effects of fiscal policy interventions on inequality and poverty. It analyzes the distributional incidence of direct and indirect taxes, direct transfers provided by social transfers and school feeding programs, and in-kind transfers generated by public services in health and education. The results show that Grenada has a tax system that is neutral on the value-added tax side and progressive on the personal income tax side. Furthermore, direct transfers make a modest contribution to poverty reduction and are almost neutral in their distributive impact. The results contribute to the understanding of who bears the burden of taxation and benefits from transfers and of how Grenada’s fiscal system can improve its redistributive effect.

Suggested Citation

  • Pozo,Wilson Jimenez & Ibarra,Silvia Granados & Ran Li & Gustavo Javier Canavire Bacarreza & Gómez Aliaga,Guillermo & Britton,Chevanne & Rios-Avila,Fernando, 2024. "Fiscal Incidence on the Island: Grenada’s Fiscal System and Its Incidence," Policy Research Working Paper Series 10678, The World Bank.
    • Handle: RePEc:wbk:wbrwps:10678
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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