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Fiscal policy, inequality and the ethnic divide in Guatemala

Maynor Cabrera, Nora Lustig () and Hilcías E. Morán
Additional contact information
Maynor Cabrera: Fedes
Hilcías E. Morán: Bank of Guatemala

No 20, Commitment to Equity (CEQ) Working Paper Series from Tulane University, Department of Economics

Abstract: Guatemala is one of the most unequal countries in Latin America and has the highest incidence of poverty. The indigenous population is more than twice as likely of being poor than the nonindigenous group. Fiscal incidence analysis based on the 2009-2010 National Survey of Family Income and Expenditures shows that taxes and transfers do almost nothing to reduce inequality and poverty overall or along ethnic and rural- urban lines. Persistently low tax revenues are the main limiting factor. Tax revenues are not only low but also regressive. Consumption taxes are regressive enough to offset the benefits of cash transfers: poverty after taxes and cash transfers is higher than market income poverty.

Keywords: inequality; poverty; ethnic divide; fiscal incidence; taxes; social spending; Guatemala (search for similar items in EconPapers)
JEL-codes: D31 H22 I14 (search for similar items in EconPapers)
Date: 2014-10
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Published in Commitment to Equity, October 2014, pages 1-26

Downloads: (external link)
http://repec.tulane.edu/RePEc/ceq/ceq20.pdf First version, 2014 (application/pdf)

Related works:
Journal Article: Fiscal Policy, Inequality, and the Ethnic Divide in Guatemala (2015) Downloads
Working Paper: Fiscal Policy, Inequality and the Ethnic Divide in Guatemala (2015) Downloads
Working Paper: Fiscal policy, inequality and the ethnic divide in Guatemala (2014) Downloads
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