Commitment to Equity (CEQ): A Diagnostic Framework to Assess Governments’ Fiscal Policies. Nora Lustig Dept. of Economics, Tulane University Non-resident Fellow, CGD & IAD World Bank, Washington DC, March 3, 2011. Background.
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Dept. of Economics, Tulane University
Non-resident Fellow, CGD & IAD
World Bank, Washington DC, March 3, 2011
Lustig (2011)“Commitment to Equity (CEQ): A Diagnostic Framework to Assess Governments’ Fiscal Policies .” (distributed)
Europe before taxes & transfers
poverty reduction: ensuring that everyone has a minimum level of consumption
insurance: preventing individuals from falling (or falling further) below the minimum level of consumption due to adverse shocks, both idiosyncratic (unemployment, illness, bad harvests, etc.) and systemic (economic crises, natural disasters, spikes in food prices, etc.)
income smoothing:ensuring that a minimum level of consumption is achieved throughout an individual’s life-cycle (maternity/paternity leave and retirement, in particular)
building poor people’s human capital: ensuring that everyone has a minimum level of education and health.
Government actions will affect living standards through growth and distribution, either by their effect on market (primary) incomes and/or post-fiscal (after net transfers) incomes
Develop an instrument that confines the assessment of government actions on post-fiscal incomes
Living below US$2.5/day ………….. 37.2
Living below US$4/day ………….. 49.3
Memo: Percentage of poorhouseholdsnotcoveredby Oportunidades, Procampo and MinimumPension (non-contributory)
Poverty %) is associatedwithsouthern, rural and indegenousHHs…Transfersexclude (are insufficient) thepooramongurban, young, indegenous and more educatedHHs.. (probits)