Fiscal Adjustment and Income Inequality [electronic resource] : Sub-National Evidence from Brazil / Joao Pedro Azevedo
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TextPublication details: Washington, D.C., The World Bank, 2014Description: 1 online resource (32 p.)Subject(s): Debt Markets | Economic Theory & Research | Finance and Financial Sector Development | Fiscal Adjustment | Fiscal Policy | Income Inequality | Inequality | Macroeconomics and Economic Growth | Poverty Impact Evaluation | Poverty ReductionAdditional physical formats: Azevedo, Joao Pedro: Fiscal Adjustment and Income Inequality.Online resources: Click here to access online Abstract: The paper combines state-level fiscal data with household survey data to assess the links between sub-national fiscal policy and income inequality in Brazil over the period 1995-2011. The results indicate that a tighter fiscal stance at the sub-national level is not associated with a deterioration in inequality measures. This finding contrasts with the conclusions of several papers in the burgeoning literature on the effects of fiscal consolidation on inequality using national data for OECD economies. In addition, the authors find that a tighter stance is typically positively associated with a measure of "shared prosperity". Hence, the results caution against extrapolating policy implications of the literature focusing on advanced economies to other settings.
The paper combines state-level fiscal data with household survey data to assess the links between sub-national fiscal policy and income inequality in Brazil over the period 1995-2011. The results indicate that a tighter fiscal stance at the sub-national level is not associated with a deterioration in inequality measures. This finding contrasts with the conclusions of several papers in the burgeoning literature on the effects of fiscal consolidation on inequality using national data for OECD economies. In addition, the authors find that a tighter stance is typically positively associated with a measure of "shared prosperity". Hence, the results caution against extrapolating policy implications of the literature focusing on advanced economies to other settings.
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