Equity and fiscal policy

Fiscal policy is one of the main tools of the State to achieve more equitable societies. In this sense, it is crucial to study the progressivity and the redistributive effects of taxation and public expenditure (especially social spending) in order to know the level of inequality in a given society.

Below are studies examining the impact of fiscal policy on equity in Latin America.


Superando el "síndrome del casillero vacío". Determinantes de la distribución del ingreso en América Latina; December 2012

González I. and R. Martner

La persistente desigualdad en América Latina parece reflejar la inexistencia de políticas específicas orientadas a disminuir esta brecha. El objetivo del presente trabajo es estimar mediante técnicas econométricas los determinantes de la distribución del ingreso en América Latina, en un contexto en que parecen coexistir el crecimiento económico y la reducción de las desigualdades, superando el "síndrome del casillero vacío" que caracterizó a la región en las décadas de 1980 y 1990. Con estudios de corte transversal en una muestra de países de la Organización de Cooperación y Desarrollo Económicos (OCDE) y de América Latina, y estimaciones de panel para 18 países latinoamericanos respecto del período 1990-2010, se muestra la relevancia de variables educacionales, institucionales y macroeconómicas en las mejoras recientes. Asimismo, se identifica la importancia de la acción fiscal, con variables como el gasto social, el gasto en educación, el gasto en capital y un indicador de progresividad tributaria.


Assessing the vertical and horizontal equity in the Value Added Tax and income tax: the impact of potential tax reforms. The cases of Ecuador, Guatemala and Paraguay; June 2011

Jorratt M.

The overall objective of this study is to evaluate the horizontal and vertical equity of VAT and income tax in Ecuador, Guatemala and Paraguay. A specific objective in the case of the VAT is to propose a methodology that incorporates the translation of the input tax in the case of exempt property, and the cascading effect of the exemptions in between. Meanwhile, in the income tax, the study aims at evaluating the fairness of different tax reforms, such as the flat tax, the dual tax and the family tax.


Evasion and equity in Latin America - April 2010

This document was coordinated by Juan Pablo Jiménez, Economic Affairs Officer of the Division in the Economic Commission for Latin America and the Caribbean (ECLAC), Juan Carlos Gomez Sabaini, consultant and Andrea Podesta, research assistant in that Division, as part of the activities of the projects "Fiscal Policy and Equity" (GER/06/001) and "Analysis of tax systems" (GER/08/001), executed by ECLAC together with the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) and funded by the Federal Ministry for Economic Cooperation and Development, Germany (BMZ).

Taxation, tax evasion and equity in Latin America and the Caribbean Gómez Sabaini, Jiménez y Podestá -- 2010
Comparative analysis of methodologies for estimating the evasion of income tax orratt y Podestá -- 2010
Argentina: An Analysis of direct taxes and calculation of escape Cetrángolo y Gómez Sabaini -- 2008
Chile: The direct tax, evasion of income tax and challenges Jorratt -- 2008
Ecuador: direct taxation, evasion and challenges Roca -- 2008
El Salvador: direct taxation, evasion and challenges Cabrera y Guzmán -- 2008
Guatemala: direct taxation, evasion on the income tax and its challenges Cabrera -- 2008
Mexico: direct taxation, calculation of tax evasion on income and challenges Álvarez -- 2008
Peru: direct taxation, evasion on the income tax and its challenges Arias -- 2008

Public finance and the fiscal pact in Latin America. - December 2008

Martner R. (editor)

This volume collects some of the documents and papers presented at the XX Regional Seminar on Fiscal Policy of ECLAC, United Nations. The date of the seminar coincided with the commemoration of the tenth anniversary of the publication "Fiscal Pact, strengths, weaknesses and challenges." Then, it seemed useful to focus the reflection of twenty years of the regional seminar on fiscal policy to the present of public finances in the region and to the future of the Fiscal Pact in Latin America.


Distributive equity and the tax system: analysis for the Argentinean case. - May 2002

Gómez-Sabaini J. C., D. Rossignolo y J.J. Santieri

This paper presents the results of an investigation about the allocation of the tax burden and the extent to which taxes alter the income distribution, with reference to Argentina and with information from 1997.


Education policies to increase social mobility in Latin America -- December 2010

Daude C.

Both income and opportunities for upward social mobility are unequally distributed in Latin America. The development in childhood is a powerful mechanism for leveling social mobility. More and better secondary education is a key element. Finally, improved school management, combining flexibility with more accounting, a modern system of assessment and incentive for administrators and school teachers are important ingredients for reform.


Social protection for all: how to cover middle sector workers with informal jobs -- November 2010

Melguizo Á.

Informality is widespread in the labor markets of Latin America and the Caribbean. Many "middle class workers" (those located around the middle of the income distribution) are employed informally and contribute to public or private pension irregularly. The government should consider extending social pensions and stimulating (even financially, through defined contributions) individual savings.


Latin America's middle sectors: key players in a renewed social contract? -- November 2010

Pietikäinen A.

A strengthened social contract in Latin American countries relies on the improved quality of public services such as health and education, which would build a constituency for a broader tax base. Latin American middle-income sectors express strong support for democracy but they are critical of how it works, largely due to the low quality of public services. Fiscal policy is at the heart of the state's relationship with its citizens ?all the more so in Latin America, given the weak social contracts and the consolidation of its democracies.


Taxation and more representation? On fiscal policy, social mobility and Democracy in Latin America -- September 2010

Daude C. y Á. Melguizo

Is the social contract broken in Latin America? This paper analyzes empirically the relationship between social policy, social mobility and democratic consolidation in Latin America and the Caribbean, using data from Latinobarómetro 2007 and 2008.


Living in duality: Fiscal Policy and Informality in Latin America -- October 2008

de Laiglesia J. R.

Although difficult to measure, informality is high in Latin America: almost half of the population working in the region can be considered informal. In Mexico, more than 60 percent of nonagricultural workers ?nearly 22 million people are employed informally or self-employed. This working population has chosen to do so, or have been excluded from the formal system of taxes and social protection. In this sense, they are witnesses of the broken social contract between citizens and the State.


Taxes in Latin America: does wealth and inequality matter? -- October 2008

Castelletti B.

To meet the challenges of development, Latin American States need fiscal resources. The good news is that in the past decade, favorable macroeconomic conditions and the design of better tax systems encouraged tax revenues in Latin America. Notably, revenues increased about 1.8 percent annually between 1990 and 2006, reflecting the comprehensive strength of taxes collected on income, profits, and general goods and services.