Essama-Nssah, B.2012-05-302012-05-302008-04https://hdl.handle.net/10986/6725Who benefits from public spending? Who bears the burden of taxation? How desirable is the distribution of net benefits from the operation of a tax-benefit system? This paper surveys basic concepts, methods, and modeling approaches commonly used to address these issues in the context of fiscal incidence analysis. The review covers the incidence of both taxation and public spending. Methodological points are supported by country cases. The effective distribution of benefits and burdens associated with fiscal policy depends on the size of the government, the distributive mechanisms involved, and the incentives properties of the policy under consideration. This creates a need for analytical methods to account for both individual behavior and social interaction. The approaches reviewed include simple reduced form regression analysis, microsimulation models (both the envelope and discrete choice models), computable general equilibrium modeling, and approaches that link computable general equilibrium models to microsimulation models. Explicit modeling facilitates the construction of counterfactuals to back up causal analysis. Social desirability is assessed on the basis of progressivity along with deadweight loss.CC BY 3.0 IGOACCOUNTINGACCURATE ESTIMATEADDITIONAL INCOMEADMINISTRATIVE COSTADMINISTRATIVE COSTSAFTER TAX INCOMEAMOUNT OF INCOMEAMOUNT OF MONEYANALYTICAL METHODSAPARTHEIDBASE YEARBENCHMARKBENEFICIARIESBUSINESS TAXBUSINESS TAXESCALCULATIONSCAPITAL EXPENDITURECAPITAL OWNERSCASH TRANSFERSCLAIMANTSCOMMODITIESCOMMODITYCOMMODITY PRICESCOMPARATIVE ADVANTAGECOMPARATIVE ANALYSISCOMPETITIVE MARKETCONSUMERCONSUMERSCONSUMPTION EXPENDITURECONSUMPTION TAXESCORPORATE INCOME TAXCORPORATE INCOME TAXESCOST OF FUNDSCOST RECOVERYCREDITSCURRENT EXPENDITUREDECISION MAKINGDEDUCTIONSDEMOGRAPHICDERIVATIVEDEVELOPING COUNTRIESDIRECT COSTSDISPOSABLE INCOMEDISTRIBUTION OF INCOMEDUMMY VARIABLEEARNINGSECONOMETRIC ANALYSISECONOMIC COSTSECONOMIC MANAGEMENTECONOMIC TRANSACTIONSELASTICITYELASTICITY OF DEMANDELASTICITY OF SUPPLYEQUILIBRIUMEQUILIBRIUM PRICESEQUITY ISSUESETHNIC GROUPSEXCISE TAXESFACTORS OF PRODUCTIONFISCAL POLICYFLAT TAXGDPGINI COEFFICIENTGOVERNMENT ACTIONSGOVERNMENT BUDGETGOVERNMENT INTERVENTIONGOVERNMENT POLICYGOVERNMENT SUBSIDYHEALTH SPENDINGHORIZONTAL EQUITYHOUSEHOLD EXPENDITUREHOUSEHOLD INCOMEHOUSEHOLD SPENDINGHUMAN CAPITALIMMUNIZATIONINCENTIVE EFFECTSINCOME EFFECTINCOME GROUPINCOME GROUPSINCOME INCREASEINCOME INCREASESINCOME LEVELINCOME LEVELSINCOME SOURCESINCOMESINCOMPLETE MARKETSINFORMATION CONSTRAINTSINSTITUTIONAL CONSTRAINTSINSTRUMENTINTERNATIONAL BANKINTRINSIC VALUEJOB TRAININGLABOR MARKETLEVEL OF EDUCATIONLEVEL PLAYING FIELDLITERACYLIVING STANDARDLIVING STANDARDSLORENZ CURVELOW INCOMELOW INCOMESLOW-INCOMELOW-INCOME INDIVIDUALSLOW-INCOME PEOPLEMARGINAL COSTMARGINAL RATEMARGINAL RATESMARGINAL TAX RATEMARGINAL UTILITYMARKET ECONOMYMARKET FAILUREMARKET STRUCTUREMBIMEASUREMENT FRAMEWORKMICRODATAOPPORTUNITY COSTOPPORTUNITY SETOUTPUTPAYROLL TAXPERSONAL INCOMEPERSONAL INCOME TAXPOLITICAL ECONOMYPRICE CHANGEPRICE CHANGESPRICE CONTROLSPRICE ELASTICITYPRIMARY EDUCATIONPRIVATE MARKETPROBABILITIESPROBABILITYPRODUCTIVE INVESTMENTPROGRESSIVE TAXPROSPERITYPUBLIC EXPENDITUREPUBLIC EXPENDITURESPUBLIC FINANCEPUBLIC GOODPUBLIC GOODSPUBLIC POLICIESPUBLIC POLICYPUBLIC SPENDINGRATES OF RETURNREAL INCOMEREAL INCOME DECLINESREGRESSION ANALYSISREGRESSIVE SUBSIDYREGRESSIVE TAXRELEVANT POPULATIONREMOTE AREASREMOTE REGIONSRETIREDRETIRED WORKERSRETURNSSALESALESSAVINGSSECONDARY EDUCATIONSHAREHOLDERSSOCIAL ASSISTANCESOCIAL COSTSOCIAL SECURITYSOCIAL SECURITY TAXESSOCIAL SERVICESSOCIAL WELFARESOCIAL WELFARE PROGRAMSTAKEHOLDERSSTOCK PRICESSUBSTITUTION EFFECTTAXTAX ADMINISTRATIONTAX BASETAX EVASIONTAX INCIDENCETAX LIABILITIESTAX LIABILITYTAX POLICYTAX PROVISIONSTAX RATETAX RATESTAX REFORMTAX REVENUETAX SHIFTINGTAX STRUCTURETAX STRUCTURESTAX SYSTEMTAX TREATMENTTAXABLE INCOMETAXATIONTAXPAYERSTOTAL COSTTRANSACTIONTRANSACTION COSTSTRANSFER PAYMENTSTREASURYUTILITY FUNCTIONUTILITY MAXIMIZATIONVALUATIONVALUE ADDEDVALUE ADDED TAXESVALUE JUDGMENTSVERTICAL EQUITYWAGEWAGESWEALTHWEALTH TAXESWELFARE ECONOMICSWorld Bank10.1596/1813-9450-4592