Coping with Rising Inequality in Asia: How Effective Are Fiscal Policies?

Abstract

This paper discusses the role and effectiveness of redistributive fiscal policies and provides estimates of the effects of taxation and government expenditure on income inequality in Asia. Tax systems around the world tend to be progressive, but government expenditure is generally found to be a more effective tool for redistributing income. In Asia, government spending on social protection has a distinctive differential distributive impact. Social protection spending appears to increase income inequality in Asia, whereas it reduces it in the rest of the world. Government expenditure on housing is also adversely affecting the distribution of income in Asia. Policy options for improving the redistributional effectiveness of fiscal policies in Asia are discussed.

Comparison of the Tax System Progressivity Over Time: Theory and Application with Mexican Data

“…The findings of Duncan (2010) suggest that progressivity has a strong negative effect on inequality in reported gross and net income and that this negative effect is stronger in countries whose institutional framework supports a pro-poor redistribution. A similar pattern was found in Claus, Martinez-Vazquez, and Vulovic (2013) for many Asian countries, where government spending on social protection appears to increase income inequality instead of mitigating it.…”

Government Social Expenditure and Income Inequalities in the European Union

“…Lastly, it is worth noting that the multivariate regression analysis developed to study the distributive incidence of social expenditure should be considered as complementary to other methodological approaches (Claus, Martínez-Vázquez and Vulovic, 2013). Additionally, fu ture research could analyse the impact of government social expenditure on income inequal ity, distinguishing between public expenditure programs (for example, primary, secondary and tertiary education; pensions and unemployment, etc.…”

“…An advantage of panel data is that they allow us to analyse dynamic relationships. This is the case of a large number of economic relationships, including income inequality (Belke 142 ángeles sánchez and antonio l. pérez-corral and Wernet, 2015; Claus, Martínez-Vázquez and Vulovic, 2013;Martínez-Vázquez et al, 2012;Niehues, 2010). Dynamic relationships are characterized by the presence of a lagged dependent variable among the explanatory variables (Baltagi, 2014;Hsiao, 2003).…”

Los Efectos De La Política Fiscal Sobre La Desigualdad

“…Este enfoque puede ser muy costoso, tanto en tiempo como en dinero (Bourguignon y Spadaro, 2006), pero los avances en la recopilación de grandes bases de datos y en la informática han provocado la creciente utilización de esta metodología. Sus ventajas son la facilidad de su implementación, la transparencia de sus supuestos subyacentes y la facilidad para comparar las diferentes alternativas (Claus et. al., 2013), además de la posibilidad de considerar la heterogeneidad de los agentes observados en los micro-datos y la posibilidad de evaluar con exactitud los costes y los beneficios de una determinada reforma (Bourguignon y Spadaro, 2006).…”

“…Los impuestos que resultan más regresivos son el Impuesto sobre Bienes y Servicios, el de Ingresos y Beneficios, y el de la Propiedad. En cuanto al gasto social, parece que el de mayor capacidad para reducir la pobreza y la desigualdad es la ayuda a la vivienda (algo que no suele apoyar la literatura, véase, por ejemplo, Claus et al, 2013); le siguen por este orden: la ayuda a la incapacidad, a la familia (véase Niehues, 2010) y a la vejez. Fuente: Elaboración propia a partir de los datos obtenidos en stats.oecd.org y la salida del paquete estadístico R…”