CIPR | Center For Inter-American Policy & Research

Tulane University

Nora Lustig Publishes Article in World Development Journal

August 11th, 2015

Fiscal Policy, Inequality, and the Ethnic Divide in Guatemala

Nora Lustig, the Samuel Z. Stone Professor of Latin American Economics and Director of the Commitment to Equity Institute (CEQI) at Tulane University, published an article in the World Development Journal, about Guatemala’s fiscal policy and inequality.

“Guatemala is among the most unequal countries in Latin America. It also has the highest incidence of poverty, especially for the indigenous population. In this paper we do a fiscal incidence analysis using the 2009 – 10 household survey ENIGFAM. The results show that fiscal policy does very little to reduce inequality and poverty overall and along ethnic lines. Persistently low tax revenues are the main limiting factor. Even worse, tax revenues are not only low but also regressive and burdensome on the poor. Consumption taxes are high enough to offset the benefits of cash transfers: poverty after taxes and cash transfers is higher than market income poverty.”

Read the article here.