Publication:
Revisiting the Distributive Impacts of Fiscal Policy in Colombia

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dc.contributor.authorBaquero, Juan Pablo
dc.contributor.authorDávalos, María Eugenia
dc.contributor.authorMonroy, Juan Manuel
dc.date.accessioned2023-07-18T20:41:00Z
dc.date.available2023-07-18T20:41:00Z
dc.date.issued2023-07-18
dc.description.abstractColombia is one of the most unequal countries in the region and the world. Given the redistributive role of fiscal policy, this study uses recent data from the 2021 Integrated Household Survey to explore the impacts of taxes and spending on poverty and inequality in Colombia. The study introduces innovations to the literature on Colombia, including an update of the fiscal microsimulation model to reflect the most recent economic context; an introduction of new fiscal policy parameters, such as gasoline subsidies and carbon taxes; and methodological improvements. The results show positive redistributive impacts, but these are considerably lower than those seen in other country members of the Organisation for Economic Co-operation and Development (OECD). Direct taxes and transfers reduce the Gini index from 0.543 to 0.505; and direct taxes, indirect taxes, subsidies, and monetary transfers reduce total poverty from 42.1 to 40.2 percent and extreme poverty from 16.1 to 11.7 percent. Direct taxes, transfers, and subsidies are progressive and contribute to poverty reduction, while indirect taxes such as the value-added tax or consumption tax are regressive and do not reduce poverty. This reflects a tax system that is progressive, but not progressive enough (with a low proportion of the population with high levels of income contributing), and cash transfer and subsidy programs that have room for improvement in their targeting.en
dc.identifierhttp://documents.worldbank.org/curated/en/099408407062312591/IDU00e7b81ab0d62404c3f0a585007e099a427ac
dc.identifier.doi10.1596/1813-9450-10520
dc.identifier.urihttps://openknowledge.worldbank.org/handle/10986/40035
dc.languageEnglish
dc.language.isoen
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Papers; 10520
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttps://creativecommons.org/licenses/by/3.0/igo/
dc.subjectFISCAL POLICY
dc.subjectINEQUALITY
dc.subjectPOVERTY AND FISCAL POLICY
dc.subjectDISTRIBUTIVE IMPACT OF TAXES
dc.subjectTRANSFER IMPACT ON POVERTY
dc.subjectSOCIAL SPENDING IMPACT INEQUALITY
dc.titleRevisiting the Distributive Impacts of Fiscal Policy in Colombiaen
dc.typeWorking Paper
dspace.entity.typePublication
okr.crossref.titleRevisiting the Distributive Impacts of Fiscal Policy in Colombia
okr.date.disclosure2023-07-06
okr.date.lastmodified2023-07-06T00:00:00Zen
okr.doctypePolicy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/099408407062312591/IDU00e7b81ab0d62404c3f0a585007e099a427ac
okr.guid099408407062312591
okr.guid099238407262310909
okr.identifier.docmidIDU-0e7b81ab-d624-4c3f-a585-07e099a427ac
okr.identifier.doi10.1596/1813-9450-10520
okr.identifier.doihttp://dx.doi.org/10.1596/1813-9450-10520
okr.identifier.externaldocumentum34112911
okr.identifier.internaldocumentum34112911
okr.identifier.reportWPS10520
okr.import.id1147
okr.importedtrueen
okr.language.supporteden
okr.pdfurlhttp://documents.worldbank.org/curated/en/099408407062312591/pdf/IDU00e7b81ab0d62404c3f0a585007e099a427ac.pdfen
okr.region.administrativeLatin America & Caribbean
okr.region.countryColombia
okr.topicMacroeconomics and Economic Growth::Fiscal & Monetary Policy
okr.topicPoverty Reduction::Equity and Development
okr.topicPoverty Reduction::Inequality
okr.topicLaw and Development::Tax Law
okr.unitEFI-LCR-POV-Poverty and Equity (ELCPV)
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