Commitment to Equity Working Paper No. 20 “Fiscal Policy, Inequality and the Ethnic Divide in Guatemala” by Maynor Cabrera, Nora Lustig, and Hilcías Morán has been published in the prestigious academic journal World Development!
Category: Commitment to Equity
A missing target in the SDGs: Tax systems should not reduce the income of the poor
A new blog post on the International Growth Center‘s website outlines why the Sustainable Development Goals needs to take what the net effect of all governments taxing and spending has on the poor. In many cases, the poor are left worse off by tax and transfer programs. “As it stands, the SDGs list of targets would not alert us of such a perverse outcome. Under Goal One on poverty reduction, there should be a Target 1.6: “By 2020 to ensure that the tax system does not reduce the income of the poor.”
IDS blog post: The Sustainable Development Goals – Reject Tax Targeting
The Co-Facilitators of the Third International Financing for Development Conference that will be held in Addis Ababa this coming July, are proposing “tax targeting” as a mechanism to promote equity in developing countries. Mick Moore, Nora Lustig, Richard Bird, Nancy Birdsall, Odd-Helge Fjeldstad, Richard Manning and Wilson Prichard demonstrate that this tactic would in fact be detrimental to poverty alleviation. See why targeted taxes won’t work here.
Center for Global Development Publishes CEQ Working Paper
Fiscal Policy, Inequality, and the Ethnic Divide in Guatemala – Working Paper 397
by Maynor Cabrera, Nora Lustig and Hilcías Moran
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 to be 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.
Two New CEQ Working Papers Now Available
Commitment to Equity is pleased to announce the availability of two new working papers published this past January. Click the title below to view:
No. 22: Fiscal Policy and Ethno-Racial Inequality in Bolivia, Brazil, Guatemala and Uruguay. By Nora Lustig
No. 27: Public Transfer and Poverty Reduction: An Evaluation of Program Contribution to the Exit Rate from Poverty of Children and the Elderly. By Marisa Bucheli
Pro-poor spending reduces poverty in Ethiopia
The World Bank has released the Ethiopia Poverty Assessment, a country with one of the highest poverty rates in the world in 2000. Today, the country has seen a 33% reduction in poverty (down from 44% in 2000) thanks to agricultural growth and pro-poor spending. Additionally, Ethiopia is one of the most equal countries in Africa, and has been able to maintain low levels of inequality in conjunction with economic growth and development.
Guatemala CEQ Policy Assessment Now Available
Commitment to Equity, in conjunction with Tulane University and the Inter-American Dialogue are pleased to announce the availability of the CEQ Policy Assessment on Guatemala (by Maynor Cabrera, Nora Lustig, and Hilcías E. Morán).
Abstract: In 2010, according to the CEQ analysis for Guatemala, fiscal policy did almost nothing to change inequality and poverty. Recent developments on fiscal policy make things worse. A reduction in social spending, particularly in the flagship CCT program “Mi Bono Seguro” will negatively impact poverty and inequality. A reform of the personal income tax will result in lower fiscal revenues. The combined effects of these changes will likely result in an increase of poverty and inequality and reinforce the chronic status quo of poverty and inequality in Guatemala.
“Making Discovery and Change Possible” Article in Tulane School of Liberal Arts Newsletter
Tulane’s School of Liberal Arts featured a piece on Prof. Lustig and the Gates Foundation funding of the Commitment to Equity initiative: “Through the Gates grant, I can support my graduate students and expand the reach of the CEQ project to new limits. I can travel and learn about new places such as Ghana and Tanzania, the two countries the Gates grant is funding,” says Lustig. “I can involve other scholars and benefit from their expertise. I can potentially have much more impact as the grant makes the project better known.” Read the entire article here
Announcing Publication of CEQ Guatemala Paper
Commitment to Equity’s 20th Working Paper “Fiscal Policy, Inequality, and the Ethnic Divide in Guatemala” is now available to download on commitmentoequity.org. Written by Maynor Cabrera (Fedes), Nora Lustig (Tulane University), and Hilcías E. Morán (Bank of Guatemala), the paper uses fiscal incidence analysis to show that takes and transfers do almost nothing to reduce inequality and poverty in Guatemala, one of the most unequal countries in Latin America.
CEQ partners with the Center for Global Development
We are pleased to announce a new Commitment to Equity (CEQ)partnership with the Center for Global Development (CGD). CGD works to reduce global poverty and inequality through rigorous research and active engagement with the policy community to make the world a more prosperous, just, and safe place for us all. CGD’s role as a partner of CEQ will be to share the global reach of their communications platform. Through a new Commitment to Equity sub-topic within their inequality topic, they will post links to CEQ studies as they become available, the CEQ papers that are jointly published with CGD, and occasional blog posts. We look forward to working with CGD and are honored to have it as a CEQ partner.