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Explaining Low Redistributive Impact in Bolivia

Author

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  • Verónica Paz Arauco
  • George Gray Molina
  • Ernesto Yáñez Aguilar
  • Wilson Jiménez Pozo

Abstract

This article analyzes the fiscal incidence of cash and in-kind transfers, taxes, and subsidies in Bolivia. Between 2007 and 2009, social spending as a share of gross domestic product rose by about three percentage points. In spite of this, fiscal policy in Bolivia has shown a low redistributive impact. The weak impact is mainly due to the presence of significant leakages in transfers to the nonpoor and to the small size of per beneficiary transfers. The impact of fiscal policy on poverty and income inequality could increase with better targeting to the poor, larger per capita benefits, and an increase in coverage and progressivity of the tax system.

Suggested Citation

  • Verónica Paz Arauco & George Gray Molina & Ernesto Yáñez Aguilar & Wilson Jiménez Pozo, 2014. "Explaining Low Redistributive Impact in Bolivia," Public Finance Review, , vol. 42(3), pages 326-345, May.
    • Handle: RePEc:sae:pubfin:v:42:y:2014:i:3:p:326-345
    DOI: 10.1177/1091142113496133
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    References listed on IDEAS

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    1. Nora Lustig & Carola Pessino & John Scott, 2014. "The Impact of Taxes and Social Spending on Inequality and Poverty in Argentina, Bolivia, Brazil, Mexico, Peru, and Uruguay: Introduction to the Special Issue," Public Finance Review, , vol. 42(3), pages 287-303, May.
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    1. Martinez Aguilar,Sandra Natalia & Fuchs Tarlovsky,Alan & Ortiz-Juarez,Eduardo & Del Carmen Hasbun,Giselle Eugenia, 2017. "The impact of fiscal policy on inequality and poverty in Chile," Policy Research Working Paper Series 7939, The World Bank.
    2. World Bank, 2014. "South Africa Economic Update : Fiscal Policy and Redistribution in an Unequal Society," World Bank Publications - Reports 20661, The World Bank Group.
    3. Branko Milanovic & Sean Higgins & Nora Lustig & Whitney Ruble & Timothy M. Smeeding, 2016. "Comparing the Incidence of Taxes and Social Spending in Brazil and the United States," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 62, pages 22-46, August.
    4. Pessino, Carola & Izquierdo, Alejandro & Vuletin, Guillermo, 2018. "Better Spending for Better Lives: How Latin America and the Caribbean Can Do More with Less," IDB Publications (Books), Inter-American Development Bank, number 9152, November.
    5. Higgins, Sean & Lustig, Nora, 2016. "Can a poverty-reducing and progressive tax and transfer system hurt the poor?," Journal of Development Economics, Elsevier, vol. 122(C), pages 63-75.
    6. Nora Lustig, 2016. "El Impacto del Sistema Tributario y el Gasto Social en la Distribucion del Ingreso y la Pobreza en America Latina: Argentina, Bolivia, Brasil, Chile, Colombia, Costa Rica Ecuador, El Salvador, Guatema," Commitment to Equity (CEQ) Working Paper Series 37, Tulane University, Department of Economics.
    7. Eduardo A. Cavallo & Tomás Serebrisky & Verónica Frisancho & Jonathan Karver & Andrew Powell & Diego Margot & Ancor Suárez-Alemán & Eduardo Fernández-Arias & Matías Marzani & Solange Berstein & Marian, 2016. "Saving for Development: How Latin America and the Caribbean Can Save More and Better," IDB Publications (Books), Inter-American Development Bank, number 94597 edited by Eduardo A. Cavallo & Tomás Serebrisky, February.
    8. Leonardo M. R. Ferreira & Giovanni A. Carosso & Natalia Montellano Duran & Soad V. Bohorquez-Massud & Gustavo Vaca-Diez & Laura Ines Rivera-Betancourt & Yara Rodriguez & Dalila G. Ordonez & Diana K. A, 2019. "Effective participatory science education in a diverse Latin American population," Palgrave Communications, Palgrave Macmillan, vol. 5(1), pages 1-18, December.
    9. Cavallo, Eduardo A. & Serebrisky, Tomás & Frisancho, Verónica & Karver, Jonathan & Powell, Andrew & Margot, Diego & Suárez-Alemán, Ancor & Fernández-Arias, Eduardo & Marzani, Matías & Berstein, Solang, 2016. "Saving for Development: How Latin America and the Caribbean Can Save More and Better," IDB Publications (Books), Inter-American Development Bank, number 7677, November.
    10. Jaime Aristy-Escuder & Maynor Cabrera & Blanca Moreno-Dodson & Miguel Sánchez-Martín, 2016. "Fiscal Policy and Redistribution in the Dominican Republic," Commitment to Equity (CEQ) Working Paper Series 47, Tulane University, Department of Economics.
    11. World Bank, 2015. "Georgia Public Expenditure Review," World Bank Publications - Reports 22259, The World Bank Group.
    12. Namibia Statistics Agency & World Bank, 2017. "Does Fiscal Policy Benefit the Poor and Reduce Inequality in Namibia?," World Bank Publications - Reports 27538, The World Bank Group.
    13. Luis F. López-Calva & Nora Lustig & John Scott & Andrés Castañeda, 2013. "Gasto social, redistribución del ingreso y reducción de la pobreza en México: evolución y comparación con Argentina, Brasil y Uruguay," Commitment to Equity (CEQ) Working Paper Series 1317, Tulane University, Department of Economics, revised Mar 2014.
    14. Guangrong Ma & Jianwei Xu & Shi Li, 2015. "The Income Redistribution Effect Of China'S Personal Income Tax: What The Micro-Data Say," Contemporary Economic Policy, Western Economic Association International, vol. 33(3), pages 488-498, July.
    15. World Bank Group, 2015. "Georgia Public Expenditure Review," World Bank Publications - Reports 22674, The World Bank Group.

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