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Explaining Low Redistributive Impact in Bolivia

Verónica Paz Arauco (), George Gray Molina, Ernesto Yáñez Aguilar and Wilson Jiménez Pozo
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Verónica Paz Arauco: Instituto Alternativo, La Paz, Bolivia, South America
George Gray Molina: United Nations Development Programme, New York, NY, USA
Ernesto Yáñez Aguilar: Instituto Alternativo, La Paz, Bolivia, South America
Wilson Jiménez Pozo: United Nations Development Programme, New York, NY, USA

Public Finance Review, 2014, vol. 42, issue 3, 326-345

Abstract: This article analyzes the fiscal incidence of cash and in-kind transfers, taxes, and subsidies in Bolivia. Between 2007 and 2009, social spending as a share of gross domestic product rose by about three percentage points. In spite of this, fiscal policy in Bolivia has shown a low redistributive impact. The weak impact is mainly due to the presence of significant leakages in transfers to the nonpoor and to the small size of per beneficiary transfers. The impact of fiscal policy on poverty and income inequality could increase with better targeting to the poor, larger per capita benefits, and an increase in coverage and progressivity of the tax system.

Keywords: Bolivia; fiscal incidence; inequality; poverty; redistribution (search for similar items in EconPapers)
Date: 2014
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Handle: RePEc:sae:pubfin:v:42:y:2014:i:3:p:326-345