Author: nladmorg

This handbook presents a step-by-step guide to applying the incidence analysis used in the multi-country Commitment to Equity project (CEQ). We define the pre- and post-net transfers income
concepts, discuss the methodological assumptions used to construct them, explain how taxes,
subsidies and transfers should be allocated at the household level, and suggestwhat to do when the
information on taxes and transfers is not included in the household survey. We also describe the
indicators that are used to assess the distributive impact, progressivity and effectiveness of social
spending, subsidies and taxes.In addition, we present sample Stata code for producing some of the
indicators. (For more on CEQ visit www.commitmentoequity.org)

Inequality on the Rise: A Current History Anthology
Inequality is stirring controversy in developing and advanced economies alike. Perceptions of unfair disparities in incomes and opportunities can undermine the legitimacy of both authoritarian and democratic governments. Yet the problem is more complex than many on the right or left care to admit. Once it reaches certain levels, income inequality impedes economic growth; at other times it seems an unavoidable trade-off in the pursuit of growth. Finding the proper balance is more than a question of economic theory; it’s a moral and political dilemma.

The eight essays collected in this e-book appeared in Current History from 2012 to 2013 in a monthly series on inequality around the world. Together they form a useful guide to the topic that benefits from Current History’s region-by-region approach. Contributors include Uri Dadush and Kemal Derviş, who provide a global overview; Martin King Whyte on China; Daniel Treisman on Russia; Ahmed Galal on the Middle East; Nora Lustig on Latin America; Jason Beckfield on Europe; Roberto Zagha on India; and Luc Christiaensen and Shantayanan Devarajan on Africa. As their essays show, each of the world’s regions has struggled with the economics and politics of income distribution. Yet, as Dadush and Derviş note, “There is no secret to the recipes that governments can use to mitigate inequality.” The key ingredient may be political will.

Nora Lustig introduces the discussion of Vox.LACEA’s online forum on the redistributive impact of fiscal policy based on incidence analysis for 7 Latin American countries

1. With the theme of ” BRICS and Africa -partnerships for integration and industrialisation” the BRICS Summit will spend a whole day in interaction with NEPAD on African development and BRICS support for African regional integration.

2. A BRICS Bank will be launched, agreed in some detail apparently. Capital will be equal shares of $10bn, much less than original proposal, thus avoiding complex negotiations. South Africa is offering to host it, still under negotiation, which again may avoid complex negotiations on location and recognise Johannesburg as a world class financial market capable of managing international bond issues for the BRICS Bank. The original concept was advanced by India last year, as a direct challenge to the World Bank, and although that dimension has been toned down it is still there. Some people here in South Africa do not see that Africa needs another development bank. Nevertheless the existence of a BRICS Bank will no doubt send a important signal about the role of the BRICS Summit process as a part of the emerging global governance system, and it will give the BRICS clout as highly sought-after co-financers.

3. A currency swap safety net of $240 bn will be concluded, reducing the need for IMF credit lines.

4. A BRICS Business Council with 5 members from each country will be established, developing sectoral programmes and events, including agriculture, to work alongside the BRICS Bank

5. A BRICS Think Tank system was put in place last week at an academic forum in Durban, with the dedicated think tanks from each country signing a joint declaration.

6.The BRICS Trade Union Forum is to be established as a permanent organisation. President Zuma will give the opening address tonight (Saturday 23 March).

7. NEPAD and Oxfam are jointly orgainising a Public Policy Forum ahead of the Summit on Monday 25 March, under the auspices of the African Platform for Development Effectiveness (the African Busan Platform).

8..A CSO “BRICS from Below” counter summit has been formed, positioning itself as a watchdog, which will operate during the next week.

On Tuesday, March 12th, Colombian Minister of Finance Mauricio Cardenas presented CEQ findings at the 2012 Equity Day presentations at the World Bank in Washington, DC. Click here to view the agenda for the meeting, and here to see the presentation.

Visit www.commitmentoequity.org and learn about how taxation and social spending impact inequality and poverty in Latin America.
The Commitment to Equity (CEQ) is a joint project of CIPR and the Department of Economics at Tulane University and the Inter-American Dialogue in Washington, DC. Directed by Nora Lustig and Peter Hakim, the CEQ uses tax and benefit incidence analysis to assess the impact of fiscal policy on inequality, poverty and access to social services. The Commitment to Equity Assessments presented here will prove a useful source for scholars and students. They can also provide a roadmap for governments, multilateral institutions, and nongovernmental organizations in their efforts to build more equitable societies.

On Wednesday, November 14th the Center for Global Development will host an event focused on the rise of the Latin American Middle Class.

Event Summary: Latin America’s emerging middle class, defined as those unlikely to fall back into poverty, has grown by 50% in recent years and now includes one of every three people on the continent, roughly equal to the number of people who remain poor. A new World Bank study finds many potential benefits from this surging middle class but cautions that these benefits can only be fully realized if countries can strike a new social contract that links middle class interests to the inclusion of those left behind. The event will include presentation of the report’s key findings and a panel discussion with some of the leading experts on the region’s middle classes.

Click here for a link to the Event page!

Professor Lustig’s research was cited in The Economist’s special report on the World Economy in an article from October 13th, 2012 titled “Gini Back in the Bottle: an unequal continent becoming less so”. Click here to read it!

Please click here to read Nora Lustig’s review of Abhijit Banerjee and Esther Duflo’s recent book Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty

Please click here to link to the most recent working paper from Tulane University’s Economics department. Published this month and coauthored with George Gray Molina, Sean Higgins, Wilson Jimenez, Veronica Paz, Claudiney Pereira, Carola Pessino, John Scott, and Ernesto Yanez, Working Paper 1216 estimates the impact direct taxes, indirect takes and subsidies, and social spending on inequality and poverty by applying a standard tax and benet incidence analysis.

Please click here to access the World Bank’s Inequality in Focus article by Nora Lustig, “Taxes, Transfers, and Income Redistribution in Latin America,” which was published by the Poverty Reduction and Equity Department.

Please click here to access the Spring 2010 Americas Quarterly article by Nora Lustig, “A Matter of Transparency: The Top One Percent in the Americas.”

As part of the reform of the World Committee on Food Security (CFS), the High-level Panel of Experts on Food Security and Nutrition (HLPE) was established in 2010, for providing credible science and knowledge based advice to underpin policy formulation. Nora Lustig was a member of the team who wrote the report on “Social Protection for Food Security.”

To see the report, click here

On May 26, 2012 I presented a paper at LASA 2012 held in San Francisco: “The Rise and Fall of Income Inequality in Mexico: 1989-2010.”

Abstract: Inequality in Mexico rose between 1989 and 1994 and declined between 1994 and 2010. We examine the role of market forces (demand and supply of labour by skill), institutional factors (minimum wages and unionization rate), and public policy (cash transfers) in explaining changes in inequality. We apply the “re-centered influence function” method to decompose changes in hourly wages into characteristics and returns. The main driver is changes in returns. Returns rose (1989-1994) due to institutional factors and labour demand. Returns declined (1994-2006) due to changes in supply and-to a lesser extent-in demand; institutional factors were not relevant. Government transfers contributed to the decline in inequality, especially after 2000.

To download presentation click here.

To download paper click here

On May 15th, Nora Lustig Participated in the “Winning the War on Inequality and Poverty in Latin America” co-hosted by the Inter-American Dialogue and Tulane University. The conference honored Enrique V. Iglesias for his contributions to economic and social advancements in Latin America and the Caribbean. Click here for more information on this conference.

Nora gave a presentation on the results of CEQ, “Taxes, Transfers, Inequality, and Poverty: Argentina, Bolivia, Brazil, and Peru,” click here to download her presentation.

In the photo above, Nora is seated with Robert Zoellick (outgoing World Bank President) during his remarks in honor of Enrique Iglesias.