CIPR | Center For Inter-American Policy & Research

Tulane University

Commitment to Equity

CEQ: Commitment to Equity

A Diagnostic Framework to Assess Governments’ Fiscal Policies

Director: Nora Lustig, Samuel Z. Stone Professor of Latin American Economics, Tulane University; and Non-resident Fellow, Center for Global Development and Inter-American Dialogue.

What is CEQ?

Led by Nora Lustig (Tulane University) and Peter Hakim (Inter-American Dialogue), the Commitment to Equity (CEQ) project is designed to analyze the impact of taxes and social spending on inequality and poverty, and to provide a roadmap for governments, multilateral institutions, and nongovernmental organizations in their efforts to build more equitable societies.

The CEQ uses incidence analysis and a specially designed diagnostic questionnaire to address three questions: How much redistribution and poverty reduction is being accomplished in each country through social spending, subsidies and taxes? How progressive are revenue collection and government spending? Within the limits of fiscal prudence, what could be done to increase redistribution and poverty reduction in each country through changes in taxation and spending? CEQ is the first framework to comprehensively assess the tax and benefits system in developing countries and to make the assessment comparable across countries and over time. Initially, CEQ has focused on Latin America.

The comprehensive incidence analysis measures how each component of the tax and benefit system is distributed and the overall impact of taxes and benefits on an array of poverty and inequality indicators. It also calculates effectiveness indicators, progressivity indicators, incidence by decile, coverage and leakages by program, and estimates the probability of remaining poor after direct transfers. (For more read the handbook)

The diagnostic questionnaire is designed to assess how aligned fiscal policies are with supporting a minimum living standard and human capital accumulation, as well as with reducing inequality. The objective is to evaluate efforts based on whether governments: i. collect and allocate enough resources to support a minimum living standard for all; ii. collect and distribute resources equitably; iii. ensure that spending is fiscally sustainable and that programs are of good quality and incentive compatible; iv. collect and publish relevant information, as well as are subject to independent evaluations.

CEQ/Latin America is a joint project of the Inter-American Dialogue (IAD) and Tulane University’s Center for Inter-American Policy and Research (CIPR) and Department of Economics. The project has received financial support from the Canadian International Development Agency (CIDA), the Development Bank of Latin America (CAF), the General Electric Foundation, the Inter-American Development Bank (IADB), the International Fund for Agricultural Development (IFAD), the Norwegian Ministry of Foreign Affairs, the United Nations Development Programme’s Regional Bureau for Latin America and the Caribbean (UNDP/RBLAC), and the World Bank.

Click here to access the CEQ Working Paper Series
Click here to access the Commitment to Equity website

Click here to access the CEQ Handbook. Note this is a working paper.

The Effects of Brazil’s High Taxation and Social Spending on the Distribution of Household Income
Sean Higgins and Claudiney Pereira
Still in Production

Social Spending and Income Redistribution in Argentina During the 2000s: The Rising Role of Noncontributory Pensions
Nora Lustig and Carola Pessino
November 2012

Declining Inequality in Latin America in the 2000s: The Cases of Argentina, Brazil and Mexico
Nora Lustig, Luis F. Lopez-Calva and Eduardo Ortiz-Juarez
July 16, 2012

The Impact of Taxes and Social Spending on Inequality and Poverty in Argentina, Bolivia, Brazil, Mexico and Peru: A Synthesis of Results
Nora Lustig, George Gray-Molina, Sean Higgins, Miguel Jaramillo, Wilson Jiménez, Veronica Paz, Claudiney Pereira, Carola Pessino, John Scott and Ernesto Yañez
Department of Economics Working Paper 1216 — August 2012

Social Spending, Taxes and Income Redistribution in Uruguay
Marisa Bucheli, Nora Lustig, Maximo Rossi and Florencia Amábile
August 31, 2012

Fiscal Incidence, Fiscal Mobility, and the Poor: A New Approach
Nora Lustig and Sean Higgins
April 2012