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An application of the CEQ Effectiveness indicators: The case of Iran

Ali Enami

No 1712, Working Papers from Tulane University, Department of Economics

Abstract: This chapter provides an application of the new CEQ effectiveness indicators for the case of Iran. The Impact and Spending Effectiveness indicators are used to assess the performance of the taxes and transfers in reducing inequality while Fiscal Impoverishment and Gains Effectiveness indicator is utilized to measure the performance of the components of the Iran's fiscal system with regard to the reduction in poverty (or not exacerbating it in the case of taxes). I find that in the case of Iran, transfers are relatively more effective in reducing inequality than taxes. For example, direct transfers together realize about 40% of their potential to reduce inequality while direct taxes together only realize about 20% of their potential. Direct and indirect taxes are especially effective in raising revenue without causing poverty to rise, a desirable property of fiscal systems. While transfers are not targeted toward the poor, they reduce poverty significantly. The main driver is the Targeted Subsidy Program (TSP), a universal cash transfer program implemented in 2010 to compensate individuals for the elimination of energy subsidies. In spite of its large poverty reducing impact, the effectiveness of TSP is rather low because of its universality.

Keywords: Inequality; poverty; fiscal incidence; marginal contribution; effectiveness indicator; Iran (search for similar items in EconPapers)
JEL-codes: D31 H22 I38 (search for similar items in EconPapers)
Date: 2017-08
New Economics Papers: this item is included in nep-ara and nep-cwa
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Working Paper: An Application of the CEQ Effectiveness Indicators: The Case of Iran (2016) Downloads
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