2016 | OriginalPaper | Chapter
Fiscal Policy, Income Redistribution and Poverty Reduction in Latin America: Bolivia, Brazil, Chile, Costa Rica, El Salvador, Guatemala, Mexico, Peru and Uruguay
Author : Nora Lustig
Published in: Contemporary Issues in Development Economics
Publisher: Palgrave Macmillan UK
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Although inequality has been falling since 2000, Latin America is still the most unequal region in the world and poverty rates are high for Latin America’s GDP per capita.1 Given these facts, the extent to which governments use fiscal policy to reduce inequality and poverty is of great relevance. This short chapter summarizes the results of applying a standard benefit-tax incidence analysis to estimate the effect of taxes and social spending on inequality and poverty in nine Latin American countries: Bolivia (Paz Arauco et al., 2014), Brazil (Higgins and Pereira, 2014), Chile (Ruiz-Tagle and Contreras, 2013), Costa Rica (Sauma and Trejos, 2014), El Salvador (Beneke et al., 2014), Guatemala (Cabrera et al., 2014), Mexico (Scott, 2014), Peru (Jaramillo, 2014), and Uruguay (Bucheli et al., 2014). Depending on the country, the household surveys utilized in the incidence analysis are for 2009, 2010, and 2011.