Fiscal adjustment and income inequality: sub-national evidence from Brazil

João Pedro Azevedo (), Antonio David, Fabiano Rodrigues Bastos and Emilio Pineda

No 6945, Policy Research Working Paper Series from The World Bank

Abstract: The paper combines state-level fiscal data with household survey data to assess the links between sub-national fiscal policy and income inequality in Brazil over the period 1995-2011. The results indicate that a tighter fiscal stance at the sub-national level is not associated with a deterioration in inequality measures. This finding contrasts with the conclusions of several papers in the burgeoning literature on the effects of fiscal consolidation on inequality using national data for OECD economies. In addition, the authors find that a tighter stance is typically positively associated with a measure of"shared prosperity". Hence, the results caution against extrapolating policy implications of the literature focusing on advanced economies to other settings.

Keywords: Subnational Economic Development; Debt Markets; Inequality; Economic Theory&Research; Poverty Impact Evaluation (search for similar items in EconPapers)
Date: 2014-06-01
New Economics Papers: this item is included in nep-lam and nep-ltv
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Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Fiscal Adjustment and Income Inequality: Sub-national Evidence from Brazil (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:6945

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