Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/299485 
Year of Publication: 
2023
Series/Report no.: 
IDB Working Paper Series No. IDB-WP-01530
Publisher: 
Inter-American Development Bank (IDB), Washington, DC
Abstract: 
This paper uses standard fiscal incidence analysis to study how much income redistribution and poverty reduction are accomplished through the fiscal system in eighteen Latin American and Caribbean (LAC) countries. We show there is considerable heterogeneity in the income inequality and poverty-reducing power of LAC fiscal systems. While all LAC fiscal systems reduce income inequality, fiscal systems in nine LAC countries are poverty-increasing, and this startling characteristic has not improved over time. When analyzing specific fiscal elements, we find that direct taxes, direct transfers, and in-kind transfers are all equalizing, and spending on education and health is often pro-poor. Moreover, contrary to expectations, indirect taxes and subsidies are more frequently equalizing than unequalizing.
Subjects: 
Fiscal policy
inequality
poverty
Latin America
JEL: 
D31
D6
E62
H22
I32
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper

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