Measuring the Full Extent of Fiscal Losses and Gains

27 Pages Posted: 6 Aug 2019

Date Written: June 13, 2019

Abstract

Current measures of fiscal impoverishment and gains are not consistent with the law of diminishing returns. This paper proposes new measures of fiscal impoverishment and gains that are consistent with the law of diminishing returns, based on a methodology that gives more significance to greater income gaps, and more importance to the experience of the poorest individuals within the fiscal system. The new indicators are decomposable and cover the incidence, intensity, and severity of fiscal impoverishment and gains. An empirical illustration using the 2014 household consumption data reveals that, overall, in Niger the fiscal system is improving the welfare of the population: only 33.2 percent of the population has become poorer due to the fiscal system, while the remaining 66.8 percent has become richer because of it. Moreover, the mean relative fiscal loss (0.014), is 11 percent lower than the mean relative fiscal gain (0.126).

Keywords: Inequality, Gender and Development, Economic Adjustment and Lending, Public Finance Decentralization and Poverty Reduction, Public Sector Economics, Macro-Fiscal Policy, Food Security, Educational Populations, Education For All, Education for Development (superceded)

Suggested Citation

Coulibaly, Mohamed and Sanoh, Aly, Measuring the Full Extent of Fiscal Losses and Gains (June 13, 2019). World Bank Policy Research Working Paper No. 8886, Available at SSRN: https://ssrn.com/abstract=3430494

Mohamed Coulibaly (Contact Author)

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Aly Sanoh

World Bank - Africa ( email )

1818 H Street
Washington, DC 20433
United States

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