Social spending, distribution, and equality of opportunities : opportunity incidence analysis
Existing evidence forms a body of"conventional wisdom"on the redistributive impact of fiscal policies that has been recently questioned by more disaggregated analyses. This paper proposes an additional extension to the traditional benefit incidence analysis to explore further the extent to which the conventional wisdom holds, as well as to provide effective guidance in fiscal decision making. The benefit incidence analysis extension includes linking fiscal policies with the concept of equality of opportunities. The paper describes this approach and showcases the application of the proposed"opportunity incidence analysis"to six pilot countries: Liberia, Cote d’Ivoire, Zambia, Tajikistan, Thailand, and Paraguay. Three main contributions stand out: first, opportunity incidence analysis complements traditional benefit incidence analysis by applying its mechanics to a more forward looking concept of equal opportunity. Second, opportunities can be used to target public spending with higher precision. Third, micro-simulations can be used to understand the cost-effectiveness of alternative spending interventions that seek to improve equality of opportunities. All of these results complement the diagnosis produced by traditional incidence analysis and provide useful information to guide specific policy decisions.
|Date of creation:||01 Jun 2013|
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- Francesca Bastagli & David Coady & Sanjeev Gupta, 2012. "Income Inequality and Fiscal Policy (2nd Edition)," IMF Staff Discussion Notes 12/08R, International Monetary Fund.
- Abras, Ana & Cuesta, Jose & Hoyos, Alejandro & Narayan, Ambar, 2012. "Equality of opportunities and fiscal incidence in Cote d'Ivoire," Policy Research Working Paper Series 6048, The World Bank.
- David Coady & Javier Arze del Granado, 2010.
"The Unequal Benefits of Fuel Subsidies; A Review of Evidence for Developing Countries,"
IMF Working Papers
10/202, International Monetary Fund.
- Arze del Granado, Francisco Javier & Coady, David & Gillingham, Robert, 2012. "The Unequal Benefits of Fuel Subsidies: A Review of Evidence for Developing Countries," World Development, Elsevier, vol. 40(11), pages 2234-2248.
- Abras, Ana & Cuesta, Jose, 2011. "Equality of opportunities, redistribution and fiscal policies : the case of Liberia," Policy Research Working Paper Series 5801, The World Bank.
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