The Impact of Taxes and Social Spending on Inequality and Poverty in Argentina, Bolivia, Brazil, Mexico, and Peru: A Synthesis of Results

by Nora Lustig, George Gray-Molina, Sean Higgins et al.
Center for Global Development, Working Paper 311, November 2012

28 pp. 955 kB:
http://www.cgdev.org/files/1426706_file_Lustig_et_al_Impact_of_Taxes.pdf

What prevents Argentina, Bolivia, and Brazil from achieving similar reductions in inequality as in Western Europe is not the lack of revenues but the fact that they spend less on cash transfers – especially transfers that are progressive in absolute terms – as a share of GDP. The impact of transfers on inequality and poverty reduction could be higher if spending on direct cash transfers that are progressive in absolute terms were increased, leakages to the non-poor reduced, and coverage of the extreme poor by direct transfer programs expanded.

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