Professor Nora Lustig (Samuel Z. Stone Professor and Director of CEQ Institute Tulane University and Nonresident Senior Fellow CGD and IAD) joined us for this webinar. The Commitment to Equity (CEQ) Institute helps conduct the fiscal incidence analysis is various countries around the world and so far the analysis has been conducted in almost 40 countries. Their objective is to measure the impact of fiscal policy on inequality and poverty across the world.
As background read, our group read chapter 9 "The Fiscal Policy, Income Redistribution & Poverty" in the CEQ Handbook 2016 (CEQ Handbook). Using comparable fiscal incidence analysis, Professor Lustig's chapter examines the impact of fiscal policy on inequality and poverty in 29 countries. The evidence, which is from around 2010, reveals that success in fiscal redistribution is driven primarily by redistributive efforts (share of social spending to GDP in each country) and the extent to which transfers are targeted to the poor and direct taxes targeted to the rich. According to Lustig, while fiscal policy always reduces inequality, this is not the case with poverty. While spending on pre-school and primary school is pro-poor (the per capita transfer declines with income) in almost all countries, pro-poor secondary school spending is less prevalent, and tertiary education spending tends to be progressive only in relative terms (equalizing, but not pro-poor). Health spending is always equalizing.
In an era when social contracts are fraying in many countries, assessing the dynamics of fiscal redistribution is vital so please join us in learning more about fiscal policy and inequality from an expert scholar.