Publication:
The Impact of Fiscal Policy on Inequality and Poverty in Zambia

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dc.contributor.authorDe La Fuente, Alejandro
dc.contributor.authorRosales, Manuel
dc.contributor.authorJellema, Jon
dc.date.accessioned2017-11-30T21:51:37Z
dc.date.available2017-11-30T21:51:37Z
dc.date.issued2017-11
dc.description.abstractThis study assesses the redistributive impact of fiscal policy––and its individual elements––in Zambia. Zambia's 2015 fiscal policy reduces inequality; the largest reduction is created by in-kind public service expenditures on education. However, fiscal policy also increases poverty in three ways: (1) there is a relatively low level of targeted, direct-transfer spending; (2) energy subsidies, which do not reach many poor households, absorb a large share of expenditures; and (3) tax instruments create a burden greater than what is received as direct or indirect benefits from subsidies or direct transfers. The number of poor and vulnerable individuals who experience net cash subtractions from their incomes is greater than the number of poor and vulnerable individuals who experience net additions. Eliminating subsidy spending while compensating poor households would help fiscal policy achieve poverty reduction and even greater inequality reduction. If subsidies on fuel, electricity, and agricultural inputs were eliminated without any compensatory mechanism, such as an increase in the Social Cash Transfer program's coverage and benefit levels, the impact of fiscal policy on poverty would likely be muted. In 2015, Zambia exempted over 80 percent of the average household's consumption basket. However, value-added tax exemptions imply only that some portion of value-added is not taxed, and so do not entirely eliminate a value-added tax burden. A more efficient way to deliver net benefits to poor and vulnerable households is through targeted cash transfers at a scale large enough to compensate for the burden created across households by value-added tax and other indirect taxes.en
dc.identifierhttp://documents.worldbank.org/curated/en/293891511202548979/The-impact-of-fiscal-policy-on-inequality-and-poverty-in-Zambia
dc.identifier.doi10.1596/1813-9450-8246
dc.identifier.urihttps://hdl.handle.net/10986/28907
dc.languageEnglish
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No. 8246
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo
dc.subjectFISCAL POLICY
dc.subjectINEQUALITY
dc.subjectINCOME INEQUALITY
dc.subjectPOVERTY
dc.subjectSOCIAL ASSISTANCE
dc.subjectTAXATION
dc.titleThe Impact of Fiscal Policy on Inequality and Poverty in Zambiaen
dc.typeWorking Paperen
dc.typeDocument de travailfr
dc.typeDocumento de trabajoes
dspace.entity.typePublication
okr.crossref.titleThe Impact of Fiscal Policy on Inequality and Poverty in Zambia
okr.date.disclosure2017-11-20
okr.doctypePublications & Research
okr.doctypePublications & Research::Policy Research Working Paper
okr.docurlhttp://documents.worldbank.org/curated/en/293891511202548979/The-impact-of-fiscal-policy-on-inequality-and-poverty-in-Zambia
okr.guid293891511202548979
okr.identifier.doi10.1596/1813-9450-8246
okr.identifier.externaldocumentum090224b085354466_1_0
okr.identifier.internaldocumentum28190548
okr.identifier.reportWPS8246
okr.importedtrueen
okr.language.supporteden
okr.pdfurlhttp://documents.worldbank.org/curated/en/293891511202548979/pdf/WPS8246.pdfen
okr.region.administrativeAfrica
okr.region.countryZambia
okr.statistics.combined5381
okr.statistics.dr293891511202548979
okr.statistics.drstats3978
okr.topicEnergy::Energy Policies & Economics
okr.topicMacroeconomics and Economic Growth::Fiscal & Monetary Policy
okr.topicMacroeconomics and Economic Growth::Taxation & Subsidies
okr.topicPoverty Reduction::Access of Poor to Social Services
okr.topicPoverty Reduction::Conditional Cash Transfers
okr.topicPoverty Reduction::Services & Transfers to Poor
okr.topicSocial Protections and Labor::Social Protections & Assistance
okr.topicPoverty Reduction::Inequality
okr.unitPoverty and Equity Global Practice Group
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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