Explaining Low Redistributive Impact in Bolivia

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 impa...

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Bibliographic Details
Published in:Public finance review 2014-05, Vol.42 (3), p.326-345
Main Authors: Arauco, Verónica Paz, Molina, George Gray, Aguilar, Ernesto Yáñez, Pozo, Wilson Jiménez
Format: Article
Language:English
Subjects:
Benefits
Bolivia
Equality
Fiscal policy
Government subsidies
Gross domestic product
Income distribution
Income inequality
Income redistribution
Inequality
Poor
Poverty
Poverty relief
Public finance
Studies
Subsidies
Tax systems
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Summary: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.
ISSN:1091-1421
1552-7530
DOI:10.1177/1091142113496133