scholarly journals Mexico

2021 ◽  
pp. 180-204
Author(s):  
Raymundo M. Campos-Vazquez ◽  
Nora Lustig ◽  
John Scott
Keyword(s):  
Fiscal Policy ◽  
Income Inequality ◽  
Social Spending ◽  
Order Effects ◽  
Indirect Taxes ◽  
Returns To Skills ◽  
Proximate Determinants ◽  
Incidence Analysis ◽  
Distribution Of Income ◽  
Redistributive Effect

This chapter focuses on income inequality in Mexico, which increased between 1989 and 1994. Between 1994 and 2006, inequality declined; between 2006–14, inequality was again on the rise. The authors apply decomposition techniques to analyse the proximate determinants of labour income inequality and fiscal incidence analysis to estimate the first-order effects of taxes and social spending on the distribution of income. The key component that underlies the ‘rise–decline–rise again’ pattern was the evolution of returns to skills. In addition, while changes in fiscal policy in the 1990s were progressive and pro-poor, the redistributive effect has declined significantly since 2010, as transfers have become less progressive and net indirect taxes have increased.

scholarly journals Inequality and Fiscal Redistribution in Middle Income Countries: Brazil, Chile, Colombia, Indonesia, Mexico, Peru and South Africa

2016 ◽  
Vol 7 (1) ◽  
Author(s):  
Nora Lustig
Keyword(s):  
South Africa ◽  
Fiscal Policy ◽  
Health Spending ◽  
Social Spending ◽  
Income Poverty ◽  
Middle Income ◽  
Middle Income Countries ◽  
The Rich ◽  
Incidence Analysis ◽  
Consumption Taxes

AbstractThis paper examines the redistributive impact of fiscal policy for Brazil, Chile, Colombia, Indonesia, Mexico, Peru and South Africa using comparable fiscal incidence analysis with data from around 2010. The largest redistributive effect is in South Africa and the smallest in Indonesia. 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 to the poor and direct taxes targeted to the rich. While fiscal policy always reduces inequality, this is not the case with poverty. When pensions are not considered a transfer, fiscal policy increases poverty in Brazil (over and above market income poverty) due to high consumption taxes on basic goods. Total spending on education is pro-poor except for Indonesia, where it is neutral in absolute terms. Health spending is pro-poor in Brazil, Chile and South Africa, roughly neutral in absolute terms in Mexico, and not pro-poor in Indonesia and Peru.

Taxes, Expenditures and Income Distribution in Switzerland

1985 ◽  
Vol 14 (3) ◽  
pp. 341-360 ◽  
Author(s):  
Robert E. Leu ◽  
Rene L. Frey ◽  
Brigitte Buhmann
Keyword(s):  
Income Inequality ◽  
Income Distribution ◽  
Government Policies ◽  
Government Budget ◽  
The Social ◽  
Welfare Expenditures ◽  
The Government ◽  
Incidence Analysis ◽  
The Impact ◽  
Redistributive Effect

AbstractIn this paper, we analyse the impact of government policies on income distribution and poverty in Switzerland. First, we give an overview of the Swiss welfare system and provide an estimate of the poverty problem in this country. Second, we discuss some major problems of fiscal incidence analysis. Third, we examine the impact of taxes and expenditures on income distribution in Switzerland using a budget incidence approach. The analysis is based mainly on the first nationwide representative Income and Wealth Survey 1980 conducted by the authors. The major findings are the following:1 The government budget, including the social security system, has a significant redistributive effect which is due mainly to expenditures rather than to taxation.2 Direct taxes reduce income inequality, measured by the Gini coefficient; indirect taxes increase it. The net effect of all taxes is to reduce income inequality.3 The redistributive effect of social welfare expenditures is larger than that of other government expenditures.

scholarly journals Income Inequality, Redistribution of Income and Trade Openness

2015 ◽  
Vol 54 (4I-II) ◽  
pp. 865-874
Author(s):  
Adeel Ali ◽  
Syed Faizan Iftikhar ◽  
Ambreen Fatima ◽  
Lubna Naz
Keyword(s):  
Income Inequality ◽  
Government Spending ◽  
Trade Openness ◽  
Developed Countries ◽  
Social Spending ◽  
Least Developed Countries ◽  
Policy Makers ◽  
Positive Effects ◽  
The Impact ◽  
Distribution Of Income

Literature on nexus between trade openness and government spending is impressive [Atif, et al. (2012), Rudra (2004), Dani (1997) and McGuire (1999)]. The literature is growing rapidly. Analysts have documented the positive effects of government social spending [see for example Mesa-Lago (1994); Huber (1996); Weyland (1996); McGuire (1999)]. Unfortunately, Pakistan lacks empirical evidences on the impact of government social spending. Although Government of Pakistan has taken number of initiatives to have some form of redistribution policies, however, inequality in Pakistan is higher as compared to other Least Developed Countries that are open to trade. This situation is alarming. This paper therefore tries to identify the nexus between trade openness and social spending for the period 1975–2012. International evidence suggests that government social spending influences poverty and distribution of income. Pakistan‘s low level achievement in terms of reducing inequality, given the likely adverse economic impact of trade openness, point towards the fact that government has to design the policy in such a way that it affects the distribution of income. Thus, exploring the effect of social spending on income inequality is necessary for the concerned policy makers.

scholarly journals Fiscal Policy and Its Role in Reducing Income Inequality: A CGE Analysis for Pakistan

2015 ◽  
Vol 54 (4I-II) ◽  
pp. 843-864
Author(s):  
Arshad Ali Bhatti ◽  
Zakia Batool ◽  
Hasnain A. Naqvi
Keyword(s):  
Fiscal Policy ◽  
Income Inequality ◽  
Growth And Development ◽  
Budget Deficit ◽  
Future Earning ◽  
Indirect Taxes ◽  
History Of ◽  
The Masses ◽  
Barriers To Growth ◽  
Constant Source

Income inequality is one of the critical barriers to growth and development in most of the developing countries including Pakistan. Every third man in Pakistan falls below the poverty line1. Moreover, the budget deficit has also been a serious issue throughout the history of Pakistan‟s economy. The persistent budget deficit is the constant source of increasing poverty and deterioration of income distribution. Since deficit is financed by increasing indirect taxes and money supply, it causes the reduction in purchasing power and leads the masses towards poverty [Arif and Farooq (2011)]. Therefore, it is a dire need of the economy to have a good public policy such that it could reduce budget deficit, alleviate poverty and redistribute income. Malik and Saqib (1985) suggest that the resources of the economy can be distributed equally only through appropriate changes in the tax system. Fiscal policy can have a significant influence on removing the gap between haves and havenots both directly and indirectly. It directly affects the disposable income of individuals, whereas affecting their future earning capacities indirectly

scholarly journals LITERATURE REVIEW IMPACT OF TAX AND SUBSIDY ON REDUCING INCOME INEQUALITY IN INDONESIA

2017 ◽  
Vol 1 (1) ◽  
pp. 118-123
Author(s):  
Sakti Prabowo
Keyword(s):  
Fiscal Policy ◽  
Income Inequality ◽  
Literature Review ◽  
Income Taxes ◽  
Social Spending ◽  
The Government ◽  
Direct Tax ◽  
Neutral Effect

Many countries have used fiscal policy Tax and subsidy as a tool to reduce income inequality and many of them have succeeded to achieve it. In contrast, tax and subsidy in Indonesia tend to have a neutral effect on inequality today. This research aims to identify the factors caused Indonesia fiscal policy doesn't have a significant impact on income inequality reduction and what steps should be taken by the government to improve the role of fiscal policy in order to reduce income inequality. From the literature review, this paper finds that Indonesia should improve the quality of public spending.  Indonesia government should Prioritize social spending and infrastructure to improve the fiscal policy role to reduce inequality. In addition, increasing direct tax such as personal income taxes should be done in order to make it more effective.

scholarly journals The Impact of Fiscal Policy on Income Inequality: A Case Study of Pakistan

2021 ◽  
Vol 26 (1) ◽  
pp. 57-84
Author(s):  
Suhrab Khan ◽  
Ihtsham ul Haq Padda
Keyword(s):  
Fiscal Policy ◽  
Income Inequality ◽  
Policy Instruments ◽  
Income Redistribution ◽  
Annual Data ◽  
Tax Base ◽  
Distributed Lag ◽  
Long Run ◽  
Indirect Taxes ◽  
The Impact

This study investigates the impact of various fiscal policy instruments on the income inequality of Pakistan using an Auto Regressive Distributed Lag (ARDL) model on annual data. We find that direct taxes reduce income inequality, measured using the Gini index, while indirect taxes increase disparities. As the major portion of tax revenues are indirect taxes, the current tax regime of Pakistan does not achieve income redistribution. Similarly, development expenditures have significantly reduced income inequality, likely through the creation of employment opportunities. On the other hand, the overall fiscal deficit increases income inequality, due to a rising public debt financed by (regressive) indirect taxes. This study suggests that in the case of Pakistan, where direct taxes are low, a large shadow economy exists, and weak tax administration prevails, an increase in development expenditures and broadening of the tax base of direct taxes should be the main fiscal policy tools for income redistribution. Moreover, persistent high fiscal deficits in the long run should be avoided. Finally, governments should reduce educational inequalities and promote democratic values in the country in order to promote greater fairness in distribution of income.

scholarly journals Economic growth and income distribution implications of public spending and tax decisions

2020 ◽  
Vol 42 (4) ◽  
pp. 351-365
Author(s):  
Zsolt Darvas
Keyword(s):  
Public Finance ◽  
Income Inequality ◽  
Low Income ◽  
Public Investment ◽  
Fiscal Rules ◽  
Social Spending ◽  
Public Expenditures ◽  
Public Infrastructure ◽  
The Impact ◽  
Distribution Of Income

AbstractBoth the level and composition of public expenditures and revenues have implications for economic development, as argued by the ‘fiscal multiplier’ and the ‘quality of public finance’ literature. Public finance decisions also influence the distribution of income. By reviewing the literature, I argue for a fair distribution of income as reflected in low income inequality, not particularly because of the impact of income inequality on long-term growth (which is a controversial issue), but primarily because income inequality typically implies inequality of opportunity. European Union countries have very diverse public finance structures and different levels of effectiveness, and there is room for improvement in growth and equality impacts in all countries. A general guideline would be that the most effective approach comprises progressive taxes and inheritance taxes, spending on education, health and public infrastructure, and better government effectiveness. At the height of the 2008 global and the subsequent European financial and economic crises, the fiscal consolidation strategies of EU countries largely relied on cutting public investment and social spending (except pensions), which is the opposite of what is suggested in the literature. Better fiscal rules and good fiscal institutions are needed to safeguard growth- and distribution friendly expenditures in a crisis.

The Role of Fiscal Policy in the Achievement of Social Cohesion. Tax Mix and Public Social Spending

2014 ◽  
Author(s):  
Muriel Saint-Suppry Ceano-Vivas ◽  
Juana Maria Rivera Lirio ◽  
Maria Jesss Muuoz-Torres
Keyword(s):  
Fiscal Policy ◽  
Social Cohesion ◽  
Social Spending

The effects of debt restructurings on income inequality in the developing world

2021 ◽  
pp. 135406612110014
Author(s):  
Glen Biglaiser ◽  
Ronald J. McGauvran
Keyword(s):  
Developing Countries ◽  
Panel Data ◽  
Income Inequality ◽  
Income Distribution ◽  
Government Spending ◽  
Tax Reform ◽  
Social Spending ◽  
The Poor ◽  
The Rich ◽  
The Impact

Developing countries, saddled with debts, often prefer investors absorb losses through debt restructurings. By not making full repayments, debtor governments could increase social spending, serving poorer constituents, and, in turn, lowering income inequality. Alternatively, debtor governments could reduce taxes and cut government spending, bolstering the assets of the rich at the expense of the poor. Using panel data for 71 developing countries from 1986 to 2016, we assess the effects of debt restructurings on societal income distribution. Specifically, we study the impact of debt restructurings on social spending, tax reform, and income inequality. We find that countries receiving debt restructurings tend to use their newly acquired economic flexibility to reduce taxes and lower social spending, worsening income inequality. The results are also robust to different model specifications. Our study contributes to the globalization and the poor debate, suggesting the economic harm caused to the less well-off following debt restructurings.

By Popular Demand: The Effect of Public Opinion on Income Inequality

2005 ◽  
Vol 4 (3-4) ◽  
pp. 261-284 ◽  
Author(s):  
Robert Andersen ◽  
Anthony Heath ◽  
David Weakliem
Keyword(s):  
Public Opinion ◽  
Income Inequality ◽  
Instrumental Variables ◽  
Public Support ◽  
Reciprocal Causation ◽  
Low Incomes ◽  
The World ◽  
Using Data ◽  
The Relationship ◽  
Distribution Of Income

AbstractThis paper examines the relationship between public support for wage differentials and actual income inequality using data from the World Values Surveys. The distribution of income is more equal in nations where public opinion is more egalitarian. There is some evidence that the opinions of people with higher incomes are more influential than those of people with low incomes. Although the estimated relationship is stronger in democracies, it is present even under non-democratic governments, and the hypothesis that effects are equal cannot be rejected. We consider the possibility of reciprocal causation by means of an instrumental variables analysis, which yields no evidence that income distribution affects opinion.

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