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Fiscal Policy, Poverty, and Inequality in a Constrained Environment: The Case of the West Bank and Gaza

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dc.contributor.authorAmjad, Beenish
dc.contributor.authorCarrasco Nunez, Haydeeliz
dc.contributor.authorFinn, Arden Jeremy
dc.contributor.authorGoldman, Maya Scott
dc.date.accessioned2024-01-31T19:02:05Z
dc.date.available2024-01-31T19:02:05Z
dc.date.issued2024-01-30
dc.description.abstractThis report analyzes the distributional impacts of the main taxes and transfers on households’ welfare in the West Bank and Gaza. The analysis uses the Commitment to Equity methodology, enabling comparison of the results to other countries where this framework has been applied. The report assesses the effects of government taxation, social expenditure, and indirect subsidies on poverty and inequality in the West Bank and Gaza. The results indicate that the combination of taxes and transfers modelled in the West Bank and Gaza reduces inequality by 6.5 Gini points but increases the national poverty headcount by 8.4 percentage points. These fiscal policy outcomes on poverty and inequality reduction are below average in terms of desirability compared to other lower-middle-income countries. The taxes and transfers modelled in the West Bank and Gaza achieve most inequality reduction through in-kind benefits from public basic education and public hospitals, followed by the Cash Transfer Program and the value-added tax (VAT). Their large impact on inequality reduction is explained by a combination of their progressivity and their size relative to household income. The redistributive effect of direct taxes, customs duties, and indirect subsidies is zero or close to zero. Indirect taxes represent the fiscal interventions contributing most to the increase in national poverty; customs duties followed by VAT represent the largest burden on households’ incomes. Direct transfers from social protection cannot offset the impoverishment effect from indirect taxes because they have very limited coverage. Only the poorest decile is a net cash beneficiary after paying taxes and receiving cashable transfers. The rest of the deciles are net payers to the fiscal system. To decrease poverty and inequality in the West Bank and Gaza, the most significant policy recommendation to emerge from the analysis is to expand direct transfers to the second and third deciles to compensate for indirect tax burdens. Financing this reform is feasible through domestic tax mobilization or through rationalization of inefficient fuel and electricity subsidies that benefit the top income deciles most.en
dc.identifierhttp://documents.worldbank.org/curated/en/099646401302432923/IDU11fba1aab1fb111482e1a1441122a743dfde3
dc.identifier.doi10.1596/1813-9450-10687
dc.identifier.urihttps://openknowledge.worldbank.org/handle/10986/40991
dc.languageEnglish
dc.publisherWashington, DC: World Bank
dc.relation.ispartofseriesPolicy Research Working Paper; 10687
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttps://creativecommons.org/licenses/by/3.0/igo/
dc.subjectCOMPARATIVE ANALYSIS
dc.subjectVAT
dc.subjectCASH TRANSFER PROGRAM
dc.subjectFISCAL POLICY
dc.subjectTAX ADMINISTRATION
dc.subjectINDIRECT TAXES
dc.subjectINEQUALITY REDUCTION
dc.subjectCOMMITMENT TO EQUITY
dc.titleFiscal Policy, Poverty, and Inequality in a Constrained Environmenten
dc.title.subtitleThe Case of the West Bank and Gazaen
dspace.entity.typePublication
okr.associatedcontenthttps://reproducibility.worldbank.org/index.php/catalog/101 Link to data and reproducibility package
okr.crossref.titleFiscal Policy, Poverty, and Inequality in a Constrained Environment: The Case of the West Bank and Gaza
okr.date.disclosure2024-01-30
okr.date.lastmodified2024-01-30T00:00:00Zen
okr.doctypePolicy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/099646401302432923/IDU11fba1aab1fb111482e1a1441122a743dfde3
okr.guid099646401302432923
okr.identifier.docmidIDU-1fba1aab-fb11-482e-a144-122a743dfde3
okr.identifier.doi10.1596/1813-9450-10687
okr.identifier.doihttp://dx.doi.org/10.1596/1813-9450-10687
okr.identifier.externaldocumentum34248497
okr.identifier.internaldocumentum34248497
okr.identifier.reportWPS10687
okr.import.id3052
okr.importedtrueen
okr.language.supporteden
okr.pdfurlhttp://documents.worldbank.org/curated/en/099646401302432923/pdf/IDU11fba1aab1fb111482e1a1441122a743dfde3.pdfen
okr.region.administrativeMiddle East and North Africa
okr.region.countryWest Bank and Gaza
okr.sectorCentral Government (Central Agencies)
okr.themeData production, accessibility and use,Gender,Human Development and Gender,Data Development and Capacity Building,Economic Policy,Rural Development,Fiscal Policy,Institutional strengthening and capacity building,Public Sector Management,Fiscal sustainability,Urban and Rural Development,Geospatial Services
okr.topicPoverty Reduction::Inequality
okr.topicMacroeconomics and Economic Growth::Fiscal & Monetary Policy
okr.unitEFI-MNA-POV-Poverty and Equity (EMNPV)
okr.volume1
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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