Disentangling the distributive impact of fiscal policy

• Walter Cont ^[1] ; Alberto Porto ^[1]
  1. [1] Universidad Nacional de La Plata

     Universidad Nacional de La Plata

     Argentina

     
• Localización: Revista de análisis económico, ISSN-e 0718-8870, ISSN 0716-5927, Vol. 36, Nº 1, 2021, págs. 109-137
• Idioma: inglés
• Títulos paralelos:
  • Descomposicion del impacto distributivo de la politica fiscal
• Enlaces
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• Resumen
  • español

    Este trabajo propone una metodología para descomponer el efecto redistributivo de la política fiscal para unidades individuales de ingreso cuando estas unidades pertenecen a grupos. La metodología es útil para desagregar cuánto del efecto redistributivo y de los efectos progresividad/regresividad se originan dentro de cada grupo, entre grupos, y por superposición de unidades, y si existen tensiones entre los efectos que resultan de esas desagregaciones. Se aporta como caso de estudio la ejecución de la política fiscal argentina en 2010.

  • English

    This paper measures the distributive impact of fiscal policy on personal and regional income distribution and provides a decomposition of the redistributive effect of fiscal policy for individual income units and when they belong to groups. This methodology is useful to identify how much of redistributive effect and also progressive/regressive effects apply within groups, between groups and among overlapping units, and whether there are tensions between different effects. The execution of fiscal policy in Argentina for year 2010 is the case of study. Fiscal policy reduces income inequality under both personal and regional definitions. The vertical effect is strong and weakly compensated by reranking. The vertical effect is a net result of progressive expenditures and regressive taxes. The selection of groups displays particular results. The findings are relevant for the design of fiscal policy in federal countries that pursue both efficiency and equity goals. In the case of Argentina (and this certainly can be extended to other federal countries), this may include rebalancing expenditures among different kinds or levels of governments, as well as the re-designing the tax system and eliminating tradeoffs observed from the current context