The views expressed in this paper are those of the authors and do not necessarily reflect the views or policies of the Asian Development Bank. The Asian Development Bank does not guarantee the accuracy of the data presented. On Pro-Poor Government Fiscal (original) (raw)

Assessing the “Pro-Poorness” of Government Fiscal Policy in Thailand

Public Finance Review

This article proposes a methodology to assess the “pro-poorness” of government fiscal policies in view of bringing marginal reforms. A government policy is said to be “pro-poor” if it benefits the poor proportionally more than the non-poor. The author first derives the poverty elasticity for the general class of poverty. Then, using the idea of poverty elasticity, she proposes a pro-poor index that can be used to assess government expenditure and tax policies. This index may be useful in making government fiscal system more beneficial toward the poor through marginal reforms. The proposed methodology is applied to Thailand, using the 1998 Socio-Economic Survey.

The Analysis of Influence of The Government Expenditure on Poverty in Indonesia

Jurnal Ekonomi Pembangunan

One of the roles of the government in efforts to reduce poverty is through an allocative role in developing effective budget allocation policies that can stimulate economic growth with the ultimate goal of suppressing and reducing poverty. Government expenditure is one of the fundamental government policy tools in efforts to reduce poverty. This research focuses on the effect of government expenditure on poverty in Indonesia. The data used in this study are secondary data including data on the realization of provincial government expenditure in Indonesia, the realization of economic growth that is substituted into the GRDP at the basis of Constant Prices in the provincial government in Indonesia and poverty in proxies in the form of the number of poor people obtained from BPS period in 2014-2018. The data analysis technique which is used in this study is the path analysis technique. Based on the results of the analysis, it can be concluded that in this study government expenditure v...

Assessing the Impact of Fiscal Policy on Poverty

Working Papers, 2009

Fiscal policy measures are a key means by which governments can influence distribution and poverty, but in fact the relationships between fiscal policy and poverty are not well understood. The most commonly used technique for assessing the distributional impact, benefit incidence analysis, is straightforward, but applied by itself it suffers from a number of serious limitations. Assessment of the impact of fiscal policy needs to be developed in various directions, including allowing for behavioural responses and incorporating a broader range of information. In parallel with this careful attention needs to be paid to more effective monitoring of the poverty impsact of fiscal policy.

Tax Incidence of Philippine Tax Reform: Poverty and Distributional Effect

Journal of Asian Finance, Economics and Business, 2021

The purpose of the study is to determine the poverty and distributional effects of the implementation of Tax Reform for Acceleration and Inclusion Law. The Computable General Equilibrium-Top Down Behavioral Microsimulation was used to obtain the effects of the tax reform on macroeconomic and microeconomic levels. Moreover, the Poverty Gap Index, Squared Poverty Gap Index, Foster, Greer, and Thorbecke Measures of Poverty, and Sen-Shorrocks-Thon Index were used to measure the poverty effect of the tax reform. Meanwhile, the Gini Coefficient and SST Gini Coefficient Index were used to measure the distributional effect of the tax reform. The results show that the implementation of the tax reform has resulted in a significant increase in household income and disposable income. Region IV has the highest estimated increase in household income. Meanwhile, Region IV remained to have the lowest household income. Further, the findings of this study suggest that the tax reform resulted in a sig...

Working Paper Series Can a poverty-reducing and progressive tax and transfer system hurt the poor? Can a poverty-reducing and progressive tax and transfer system hurt the poor? *

2015

Whether the poor are helped or hurt by taxes and transfers is generally determined by comparing income distributions before and after fiscal policy using stochastic dominance tests and measures of progressivity and horizontal inequity. We formally show that these tools can fail to capture an important aspect: that a substantial proportion of the poor are made poorer (or non-poor made poor) by the tax and transfer system. We call this fiscal impoverishment, and axiomatically derive a measure of its extent. An analogous measure of fiscal gains of the poor is also derived, and we show that changes in the poverty gap can be decomposed into our axiomatic measures of fiscal impoverishment and gains. We also establish dominance criteria for unambiguous comparisons of fiscal impoverishment and gains under the current system to that under a proposed reform, for a range of possible poverty lines. We illustrate using Brazilian data. * For detailed comments on earlier versions of the paper, we ...

Alternative Measures of Income Poverty and the Anti-Poverty Effects of Taxes and Transfers

The Census Bureau prepared a number of alternative income-based measures of poverty to illustrate the distributional impacts of several alternatives to the official measure. The paper examines five income variants for two different units of analysis (families and households) for two different assumptions about inflation (the historical Consumer Price Index and a “Research Series” alternative that uses current methods) for two different sets of thresholds (official and a formula-based alternative base on three parameters). The poverty rate effects are analyzed for the total population, the distributional effects are analyzed using poverty shares, and the anti-poverty effects of taxes and transfers are analyzed using a percentage reduction in poverty rates. Suggestions for future research are included.

Evaluating the Poverty Impact of Economic Policies: Some Analytical Challenges

Where redistribution and anti-poverty policies consist of cash transfers allocated according to some pre-specified rules, evaluating their impact on the distribution of living standards and poverty might seem straightforward. It seems sufficient to apply the transfer rules to some representative sample of households. This is the essence of 'incidence analysis' and micro-simulation techniques used in many countries. In practice, however, things are not so easy.

Fiscal Policy and Poverty Reduction (1)

Fiscal policy is a financial tool used by the government to correct expected economic disturbances and reset the economy to an equilibrium state. Based on this course, the current study investigates fiscal policy and its effect on poverty reduction in Nigeria from the year 1970-2015. The model that was adopted for the study is the Autoregressive distributed lag model with the idea of capturing the dynamic responses of the endogenous variable caused by changes in the observed variable lags and the contemporaneous and lagged values of the other explanatory variables. The test for the presence of the Unit root was conducted using both Augmented Dickey-Fuller and Phillip Perron. The result shows that in the ADF result that all the variable were stationary at first difference while only the Overseas Development Assistance (ODA) was stationary at levels while the Phillip Perron result shows that only Other Government Revenue (OGR) and Overseas Development Assistance (ODA). The Narayan bound test co-integration test was conducted in a graphical form, following the result, there exists a long-run relationship in the model. The ARDL test which comprises of the long-run estimate and short-run reveals that the estimated coefficients of the dynamic models are smaller in the short run as compare to the long-run estimate. Secondly, the diagnostic test shows that the error terms of the short-run models are normally distributed and are homoscedastic. Majority of the findings are revealed in the work. Based on this, the study recommends; focus more on the use of other government revenue sources (non-tax income) in the finance of their expenditures and implementation of programmes.

The Effect of Government Expenditure on Poverty in Indonesia

Advances in economics, business and management research, 2022

The objective of this research is to determine the effect of education function expenditure, social protection function expenditure and health function expenditure on poverty in Indonesia. The data used in this research are secondary data sourced from the Ministry of Finance and the Central Bereau of Statistics. The analysis method used in this research is panel data regression. Based on the regression results, it is obtained that the fixed effect model as the best model to be used in analysis. Based on the results of the partial test, it was found that social protection function expenditure had a negative effect on poverty in Indonesia, while health function expenditure had a positive effect on poverty in Indonesia, while education function expenditure has no effect on poverty in Indonesia. Furthermore, when viewed simultaneously, education function expenditure, social protection functions expenditure and health function expenditure have a positive effect on poverty in Indonesia with an Adjusted Rsquared value of 0.9973 or 99.73 percent. These results show that 0.27 percent are influenced by variables outside the model. As a consideration for the Indonesian government to overcome poverty, it can be done by increasing social protection function expenditure, this is because social protection expenditure is significantly able to reduce poverty levels in Indonesia. While on education function expenditure and health function expenditure, to reduce poverty in Indonesia, expenditure is not only focused on mandatory spending, but the government should be able to allocate budget for programs that are right on target and can increase human resource productivity.

A Critique of Poverty Measurement

1996

The aim of this paper is twofold. The first is to illustrate that a poverty index can be derived from a decomposition of an appropriate inequality index. The advantage of decomposing an inequality index is that the decomposition supplies additional information that is useful for poverty measurement. The second purpose is to illustrate the kind of policy analysis that can be performed with a decomposed inequality index by decomposing the Gini coefficient into Sen's poverty index and other components. The methodology suggests an answer to the following question: Assume that a tax has been imposed on an expenditure item or an income source, what will be the impact on the components of the inequality index? The analysis is performed with data from Romania. D 2002 Published by Elsevier Science B.V. 0176-2680/02/$ -see front matter D 2002 Published by Elsevier Science B.V. PII: S 0 1 7 6 -2 6 8 0 ( 0 1 ) 0 0 0 6 9 -6 www.elsevier.com/locate/econbase *