Fiscal Policy, Income Redistribution and Poverty Reduction in Low and Middle Income Countries

Nora Lustig

No 1701, Working Papers from Tulane University, Department of Economics

Abstract: Using comparable fiscal incidence analysis, this paper examines the impact of fiscal policy on inequality and poverty in twenty-nine low and middle income countries for around 2010. Success in fiscal redistribution is driven primarily by redistributive efforts (share of social spending to GDP in each country) and the extent to which transfers 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. While spending on pre-school and primary school is pro-poor (the per capita transfer declines with income) in almost all countries, pro-poor secondary school spending is less prevalent, and tertiary education spending tends to be progressive only in relative terms (equalizing, but not pro-poor). Health spending is always equalizing except for in Jordan.

Keywords: Fiscal incidence; social spending; inequality; poverty; developing countries (search for similar items in EconPapers)
JEL-codes: D31 H22 H5 I3 (search for similar items in EconPapers)
Date: 2017-01, Revised 2017-08
New Economics Papers: this item is included in nep-lam, nep-ltv, nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

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http://repec.tulane.edu/RePEc/pdf/tul1701r.pdf Revised Version, August 2017 (application/pdf)

Related works:
Working Paper: Fiscal policy, income redistribution and poverty reduction in low and middle income countries (2017)
Working Paper: Fiscal Policy, Income Redistribution and Poverty Reduction in Low and Middle Income Countries (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:tul:wpaper:1701

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