nep-pbe New Economics Papers
on Public Economics
Issue of 2013‒08‒10
nineteen papers chosen by
Keunjae Lee
Pusan National University

  1. Fair tax evasion and majority voting over redistributive taxation By Weinreich, Daniel
  2. Cyclicality of statutory tax rates By Strawczynski, Michel
  3. Migration And The Welfare State: Political-Economy Perspective On Tax Competition By Assaf Razin
  4. Does a work effort norm lead to more efficient taxation in majority voting? By Weinreich, Daniel
  5. How Redistributive is Fiscal Policy in Latin America?: The Case of Chile and Mexico By Barbara Castelletti
  6. Taxing Multinationals in the Presence of Internal Capital Markets By Marko Köthenbürger; Michael Stimmelmayr
  7. Public Deficit Bias and Immigration By Michael Ben-Gad
  8. Crime and Economic Growth: Evidence from India By Kumar, Surender
  9. Redistribution Policy in Europe and the United States: Is the Great Recession a 'Game Changer' for Working-age Families? By Herwig Immervoll; Linda Richardson
  10. Are Elections Debt Brakes? Evidence from French Municipalities By Caseette, Aurélie; Farvaque, Etienne
  11. Baseline results from the EU27 EUROMOD By Jara Tamayo, Holguer Xavier; Sutherland, Holly
  12. The Impact of Same-Sex Marriage on Hawai‘i’s Economy and Government: An Update After the U.S. Supreme Court’s Same-Sex Marriage Decisions By Sumner la Croix; Lauren Gabriel
  13. Optimal Redistributive Pensions with Temptation and Costly Self-Control By Pier-Andre Bouchard St-Amant; Jean-Denis Garon
  14. Efficiency and Equity Aspects of Energy Taxation By Vandyck, Toon
  15. Deficits, Gifts, and Bequests By Daniel Barczyk
  16. Pension reform sustainability in the EU: a pension wealth-based framework By Grech, Aaron George
  17. Protecting public investment against shocks in the West African economic and monetary union : options for fiscal rules and risk sharing By Dessus, Sebastien; Varoudakis, Aristomene
  18. Regional Disparities in Per Capita Income in India: Convergence or Divergence? By A.P.Thirlwall
  19. Trends in Poverty and Inequality in Decentralising Indonesia By Riyana Miranti; Yogi Vidyattama; Erick Hansnata; Rebecca Cassells; Alan Duncan

  1. By: Weinreich, Daniel
    Abstract: We shed some light on fairness preferences regarding tax evasion. Individuals perceive income inequality which they are responsible for as fair (e.g. work effort) while inequality resulting from factors outside their reach is regarded as unfair (e.g. productivity or wage rate). This affects the incentives to hide income from tax authorities and supply labor. We set up a model where individuals simultaneously choose unreported income and work effort given a linear taxation scheme. We show the conditions for which individuals respond with lower or higher unreported income and work effort when fair tax evasion is introduced. Beyond, it can be shown that unreported income increases while work effort decreases when the tax rate is raised. Finally, we consider a majority voting over redistributive taxation. Thereby, it is shown that the median voter prefers lower (higher) taxation if she evades less (more) taxes than would be fair since raising the tax rate would enlarge (reduce) the deviation from fair tax evasion. This affects the moral cost as peceived by the individuals.
    Keywords: redistributive taxation, majority voting fairness, tax evasion, labor supply
    JEL: D31 D78 H26 H30
    Date: 2013–08
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:48919&r=pbe
  2. By: Strawczynski, Michel
    Abstract: Most studies on cyclical fiscal policy ignore statutory taxes due to a lack of data. In this paper I build on singular data on statutory tax rates in Israel, in order to study how they are changed by the government in expansions and recessions. After differentiating between ideological (exogenous) tax changes, to those that react to the cycle (endogenous) using Romer and Romer (2010) technique, I check whether endogenous statutory tax rates are a-cyclical or counter-cyclical, as recommended by theoretical models. I found that while direct taxes are a-cyclical, indirect taxes (and in particular VAT) are changed procyclically. A pseudo-panel analysis based on the different types of taxation and a panel analysis based on indirect taxation, show that the main reason for statutory tax changes is the existence of economic crises; this explanation is stronger than economic considerations like population or expenditure growth, legal considerations like the rigidity for changing statutory taxes, and income distribution considerations like the incidence on the bottom income decile.
    Keywords: Cyclicality, Statutory Taxes, Crisis
    JEL: H20 H30
    Date: 2013–08–02
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:48821&r=pbe
  3. By: Assaf Razin (Department of Economics)
    Abstract: The paper revisit the issue of whether tax competition is a race to the bottom. I analyze tax competion among a continuum of competing host countries facing an upward†sloping supply of would be igrants. Capital move freely across the host country economies. I show how the fiscal burden of migration brings out a tax competition equilibrium whereby taxes on labor and capital income are higher than under a coordination equilibrium.I then introduce foreign direct investment and show how it counteract the forces for high taxation.
    Date: 2013
    URL: http://d.repec.org/n?u=RePEc:red:sed013:48&r=pbe
  4. By: Weinreich, Daniel
    Abstract: This paper introduces a work effort norm into a three-type ability approach to optimal linear income taxation. According to this social norm type, individuals experience stigma when working more or less than the average. This leads to a smaller dispersion in labor supply. The individual work incentives then induce post-tax income inequality to rise. Based on this, it can be shown that the socially optimal tax rate is unambiguously increasing with the strength of the work effort norm. Turning to majority voting the tax rate preferred by the median voter could decrease when the work effort norm is introduced. We can show that the majority tax rate turns out to be inefficiently low or high. Beyond, for large preference parameters the difference between the first-best tax rate and the majority tax rate seems to diminish. Further, for specific wage distributions there seem to exist a preference strength which ensures efficient taxation. Subsequently, the work effort norm can reduce the inefficiency implemented by majority voting.
    Keywords: optimal income taxation, majority voting work effort norm, labor supply, redistribution
    JEL: D70 H21 H30
    Date: 2013–08
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:48913&r=pbe
  5. By: Barbara Castelletti
    Abstract: This paper looks at the incidence of fiscal policy on the income distribution for Chile and Mexico. Notably by broadening the income concept to account for in-kind benefits and taxes, this paper provides a full picture of the effect of fiscal policy on reducing income inequality. The contrast between the estimates for Chile and Mexico and the rest of OECD countries provides an overall snapshot of income distribution of high inequality countries vis-à-vis advanced economies. The breakdown of the Gini coefficient at a detailed level of policy instruments also enables us to identify the main channels of income inequality reduction and shows how these results differ across countries. Our results for Chile and Mexico suggest that fiscal policy significantly benefits the poorest income groups, mainly through in-kind services such as education and health care. Nevertheless, when compared with outcomes in high-income countries, the effectiveness of fiscal policy in reducing inequality is still limited. Cash transfers (especially those for old-age programmes), direct taxation and, to some extent, a higher market inequality are the main factors behind this difference.<BR>Cet article étudie l’impact des politiques fiscales sur la répartition des revenus au Chili et au Mexique. En outre, en intégrant dans la définition des prestations les transferts en nature et les taxes, cet article dresse un portrait complet de l’effet des politiques fiscales dans la réduction des inégalités salariales. Les différences dans les estimations du Chili et du Mexique avec le reste des pays de l’OCDE permettent un aperçu général de la répartition des revenus dans les pays les plus inégalitaires par rapport aux économies avancées. L’analyse du coefficient de Gini à un niveau détaillé des instruments politiques nous permet également d’identifier les principaux canaux de réduction des inégalités et de comprendre l’origine des divergences entre pays. Nos résultats pour le Chili et le Mexique suggèrent que la politique fiscale bénéficie significativement aux pays à faible revenu, principalement à travers des services en nature tels que l’éducation et les services de santé. Toutefois, en comparaison avec les résultats des pays à haut revenu, l’efficacité de la politique fiscale sur la réduction des inégalités reste limitée. Les transferts en espèces (particulièrement ceux liés au système des retraites), l’imposition directe et, dans une certaine mesure, de fortes inégalités de marché sont les principaux facteurs de cette différence.
    Keywords: fiscal policy, Latin America, income distribution, tax-benefit analysis, politique fiscale, Amérique latine, répartition des revenus, analyse socio-fiscal
    JEL: D31 H20 H31 H40 I30 I32 I38
    Date: 2013–07–24
    URL: http://d.repec.org/n?u=RePEc:oec:devaaa:318-en&r=pbe
  6. By: Marko Köthenbürger (ETH Zurich and CESifo); Michael Stimmelmayr (University of Munich and CESifo)
    Abstract: There is ample evidence that internal capital markets incur efficiency costs for multinational enterprises (MNEs). This paper analyzes whether tax avoidance behavior interacts with the costs of running an internal capital market and how policies of competing governments respond to it. We show that the interaction in itself may lead to profit taxes that are too high (low) from a social perspective, provided the costs are attenuated (magnified) by higher profit taxes. We also show that internal efficiency costs might render infrastructure provision inefficiently low. Further, we clarify the implications of the MNE’s decision to set up an internal capital market and the effect of external finance on the behavior of competing governments.
    Keywords: fiscal competition, multinational firms, internal efficiency costs, corporate finance, corporate tax avoidance.
    JEL: H25 D21 F23
    Date: 2013–02
    URL: http://d.repec.org/n?u=RePEc:kud:epruwp:13-02&r=pbe
  7. By: Michael Ben-Gad (City University London)
    Abstract: How much can governments shift the cost of government expenditure from today's voters to tomorrow's generations of immigrants, without resorting to taxation that is explicitly discriminatory? I demonstrate that if their societies are absorbing continuous flows of new immigrants, we should expect governments that represent the interests of today's population, even if that population is altruistically linked to future generations, to choose policies that shift some portion of the tax burden to the future. This bias in favor of deficit finance is not infinite. Today's population or their descendents, together with future immigrants, ultimately pay the higher taxes necessary to finance the accumulated debt, and live with the additional excess burdens these higher taxes generate. For a given rate of immigration and policy horizon, governments balance the deadweight losses associated with fluctuating tax rates against the benefits that accrue to the initial resident population from shifting part of the burden of financing government expenditure to future immigrant families. To measure the deficit bias, I analyse the dynamic behavior of an optimal growth model with overlapping dynasties and factor taxation, calibrated for the US economy. Models with overlapping infinite-lived dynasties allow for a very clear distinction between natural population growth (an increase in the size of existing dynasties) and immigration (the addition of new dynasties). They also provide an alternative to the strict dichotomy between models with overlapping generations, where agents disregard the impact of their choices on future generations, and the quasi-Ricardian world of infinite-lived dynasties with representative agents that fully participate in both the economy and the political system in every period. The trajectory of the debt burden predicted by the model is a good match for the rise in US Federal government debt since the early 1980's, as well as the increases in debt projected by the Congressional Budget Office over the next few decades.
    Date: 2013
    URL: http://d.repec.org/n?u=RePEc:red:sed013:21&r=pbe
  8. By: Kumar, Surender
    Abstract: This paper empirically examines the causality between crime rates and economic growth using state level data in India. A reduced form equation has been estimated using instrumental variable approach to correct for joint endogeneity between crime and economic growth. Higher crimes may reduce level of per capita income and its growth rate. Controlling intentional homicide and robbery rates in each of the states to the minimum level they observed during 1991-2011 period, the predicted annual growth in per capita income could have been higher by 1.57 and 1.2 percentage points, respectively. The average annual gain in growth rate by bringing down the homicide rate at a level of national minimum could be 0.62 percentage points. Note that the loss in growth rate is lower or negative in the states that have higher per capita income.
    Keywords: Crime, economic growth, panel data, India.
    JEL: H10 H4 K1 K14 O4 O43 O5 O53
    Date: 2013
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:48794&r=pbe
  9. By: Herwig Immervoll; Linda Richardson
    Abstract: Working-age individuals and their families have experienced increases in relative income poverty before the Great Recession (GR), and they have also seen significant income losses since the beginning of the downturn in 2007/8. This paper examines the effects of benefit and tax reforms on the distribution of incomes of non-elderly individuals in Europe and in the United States both before and after the GR. We aim to place recent policy responses in context of both the broader trends in redistribution patterns observed since the 1980s, and the immediate crisis-related challenges, including a much greater need for government support, and large and rapidly growing government debt. Analysis of historical household income data confirms the common finding that redistribution reduces income inequalities by much less in the US than in much of Europe. Since more redistributive tax-transfer systems tend to be more effective as a backstop to widening earnings gaps, redistribution in the US was also less effective at offsetting the substantial increase in the market-income inequality in the 2-3 decades leading up to the GR. Focussing on more recent policy changes, we then calculate income gains and losses that can be attributed to reforms shortly before and after the GR at different points in the earnings spectrum. The results show that a combination of discretionary and automatic policy changes in the US have significantly narrowed the pre-GR gap between the equalising capacities of US and European redistribution measures, and between their abilities to cushion the effects of economic shocks on household income. We argue, however, that this is unlikely to signify any longer-term convergence, and that Europe/US comparisons need to go beyond the common focus on differences in redistribution levels. In our view, an equally important question is how well redistribution measures respond and adapt to evolving social and fiscal challenges at different points in the economic cycle.<BR>Les individus d'âge actif et leurs familles ont été exposés à une aggravation de la pauvreté relative avant la Grande Récession et ont également essuyé des pertes de revenu non négligeables depuis le début de la récession de 2007-08. Le présent document a pour objet d'examiner les effets des réformes des prestations et des prélèvements fiscaux sur la distribution des revenus des individus non âgés en Europe et aux États-Unis, tant avant qu'après la Grande Récession. Nous nous donnons pour objectif de replacer les mesures gouvernementales prises récemment face à la récession dans le contexte des grandes tendances se dégageant des schémas de redistribution observés depuis les années 80 et des difficultés immédiates liées à la crise, dont la nécessité devenue beaucoup plus aigüe d'un soutien des pouvoirs publics et un endettement élevé des États qui tend à se creuser rapidement. L'analyse des données historiques relatives aux revenus des ménages confirme l'idée communément admise selon laquelle la redistribution réduit beaucoup moins les inégalités de revenus aux États-Unis que dans la plus grande partie de l'Europe. Les systèmes de prélèvements et de prestations plus redistributifs étant généralement plus efficaces pour enrayer le creusement des écarts de revenus, la redistribution a également été une arme moins efficace aux États-Unis pour contrebalancer l'aggravation notable des inégalités de revenu marchand constatée pendant les vingt à trente années ayant précédé la Grande Récession. Revenant aux réorientations plus récentes de l'action publique, nous calculons ensuite les gains et pertes de revenu imputables aux réformes mises en oeuvre peu avant et peu après la Grande Récession en différents points du spectre des gains. Les résultats obtenus montrent qu'aux États-Unis, les effets conjugués des inflexions de l'action publique à caractère automatique ou discrétionnaire ont sensiblement réduit l'écart qui existait avant la Grande Récession entre la capacité de nivellement des revenus du système américain et celle résultant des mesures de redistribution en vigueur en Europe ainsi qu'entre les capacités respectives des systèmes américain et européen à atténuer les effets des crises économiques sur le revenu des ménages. Selon nous, il n'est toutefois guère probable que cela annonce une convergence à long terme et il faut s'affranchir, dans les comparaisons entre Europe et États- Unis, de la tendance à se polariser sur les différences entre les niveaux de redistribution. De notre point de vue, il est tout aussi important de se demander jusqu'à quel point les mesures de redistribution répondent et sont adaptées à des défis sociaux et budgétaires en constante évolution à différents moments du cycle économique.
    Date: 2013–06–17
    URL: http://d.repec.org/n?u=RePEc:oec:elsaab:150-en&r=pbe
  10. By: Caseette, Aurélie; Farvaque, Etienne
    Abstract: We show that voters are fiscal conservatives, although in the long run only: while the average (over the mandate) level of debt has a negative impact on the probability of reelection, pre-election debt accumulation by incumbents increases their probability of reelection. As the negative impact is larger the higher the debt level, it compensates the short run effect. Elections thus appear as a disciplining device, even if a weak one.
    Keywords: Debt, Elections, Municipalities, Political Business Cycle
    JEL: D72 H72 H74
    Date: 2013
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:48808&r=pbe
  11. By: Jara Tamayo, Holguer Xavier; Sutherland, Holly
    Abstract: This paper presents baseline results from the latest version of EUROMOD (version F6.36+), the tax-benefit microsimulation model for the EU. First, we briefly report the process of updating EUROMOD. We then present indicators for income inequality and risk of poverty using EUROMOD and discuss the main reasons for differences between these and EU-SILC based indicators. We further compare EUROMOD indicators across countries and over time between 2009 and 2012. Finally, we provide estimates of marginal effective tax rates (METR) for all 27 EU countries in order to explore the effect of tax and benefit systems on work incentives at the intensive margin. Throughout we highlight both the potential of EUROMOD as a tool for policy analysis and the caveats that should be borne in mind when using it and interpreting results. This paper updates the work reported in EUROMOD Working Paper EM3/2013.
    Date: 2013–08–01
    URL: http://d.repec.org/n?u=RePEc:ese:emodwp:em13-13&r=pbe
  12. By: Sumner la Croix (University of Hawaii Economic Research Organization Department of Economics, University of Hawai‘i–Mānoa Global Public Health and Population Studies Program, University of Hawai‘i–Mānoa); Lauren Gabriel (William S. Richardson School of Law, University of Hawai‘i–Mānoa)
    Abstract: This report provides an update on the potential impact of marriage equality in Hawai‘i on the state’s economy in light of the U.S. Supreme Court’s recent DOMA and Proposition 8 decisions. We find that marriage equality is likely to lead to substantial increases in Hawai‘i visitor arrivals, visitor spending, and state and county general excise tax revenues due to pent-up demand for same-sex marriage. Over the 2014-2016 period, we estimate that additional visitor spending due to marriage equality would amount to $217 million. The additional gains in visitor spending are time-sensitive: Spending by U.S. same-sex couples and their guests on honeymoons and marriages will be diverted to other states until Hawai‘i recognizes marriage equality.
    Keywords: same-sex, marriage, visitors, spending, tourism, Hawai‘i
    JEL: J12 K36 I18
    Date: 2013–07
    URL: http://d.repec.org/n?u=RePEc:hai:wpaper:201312&r=pbe
  13. By: Pier-Andre Bouchard St-Amant (INET, Columbia and Queen's); Jean-Denis Garon (UQAM)
    Abstract: We characterize an optimal redistributive pension scheme when individuals exert costly self-control in the face of temptation. We revisit the idea that this scheme reduces the cost of self-control. Individuals are heterogenous in both the intensity of their self-control problems and their productivity. Pensions simultaneously have three effects: redistributing income across retirees, forcing workers to save, and influencing the cost of exerting self-control. In the optimal policy, the effect of taxation on the cost of self-control is fundamentally related to the redistributive level of the pension system. Proportional pension taxation has an adverse effect on the mental of self-control when temptation declines with income. This partially offsets the forced-saving benefits of the system, and call for a more redistributive scheme. If temptation increases with income, taxation unambiguously reduces the cost of self-control only if the benefit structure taxes individuals for their contributions. Otherwise, taxation also increases such cost, unless the temptation problem is of weak intensity. This negative welfare effect gets worse when the intensity of self-control problems increases. These results contrasts with a first best optimum, where the mental cost of self-control is driven to zero and consumption is smoothed across periods.
    Keywords: Taxation, Redistribution, Pensions, Self-Control
    JEL: H55 H21 D03
    Date: 2013–08
    URL: http://d.repec.org/n?u=RePEc:qed:wpaper:1311&r=pbe
  14. By: Vandyck, Toon
    Abstract: We analyse the distributional effects of increased oil excises in Belgium by combining aComputable General Equilibrium (CGE) model with the EUROMOD microsimulation frameworkthat exploits the rich detail of household-level data. The link between the CGE model and themicro level is top-down, feeding changes in commodity prices, factor returns and employment bysector into a non-behavioural microsimulation. The results suggest that policymakers face anequity-efficiency trade-off driven by the choice of revenue recycling options. Distributional effectsof the environmental tax reform appear to depend strongly on changes in factor prices and welfarepayments.
    Date: 2013–07–30
    URL: http://d.repec.org/n?u=RePEc:ese:emodwp:em12-13&r=pbe
  15. By: Daniel Barczyk (McGill University)
    Abstract: What is the response of aggregate consumption to a deficit-financed tax cut? It is well-known that intergenerational transfers are key to answer this question. I address this issue by studying a heterogeneous-agents overlapping-generations economy with imperfect altruism. The model generates richer and more realistic transfer behavior than a dynastic or an overlapping-generations economy. The model is calibrated to match aggregate data on inter-vivos transfers. I find that the response of aggregate consumption to a deficit-financed tax cut is quantitatively more similar to the overlapping-generations economy's welfare implications, however, tend to be closer to the dynastic economy's.
    Date: 2013
    URL: http://d.repec.org/n?u=RePEc:red:sed013:25&r=pbe
  16. By: Grech, Aaron George
    Abstract: Most assessments of pension sustainability focus on the projected fall in spending. However interest in the impact on adequacy, usually measured by replacement rates, is increasing. In this paper we show that replacement rates have significant defects, related to being point-in-time indicators and the use of unrepresentative assumptions. We argue for the use of pension wealth calculated using more realistic assumptions. Looking at ten EU countries, we find that while generosity decreased significantly, systems’ effectiveness in alleviating poverty remain strong in countries where minimum pensions were improved. However, moves to link benefits to contributions have raised concerns for women and for those on low incomes. Though reforms have reduced the fiscal challenge of ageing, in many countries pressures will persist and further reforms are likely.
    Keywords: Social Security and Public Pensions; Retirement; Poverty; Retirement Policies.
    JEL: H55 I38 J26
    Date: 2013–04
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:48800&r=pbe
  17. By: Dessus, Sebastien; Varoudakis, Aristomene
    Abstract: West African Economic and Monetary Union arrangements have been instrumental in helping member countries maintain low inflation. However, a lesser-known characteristic of the West African Economic and Monetary Union, with possible implications for economic growth, is the high exposure to shocks and the pro-cyclicality of fiscal policy associated with these arrangements. Evidence from a panel of 80 low-income and lower middle-income countries over the period 1995-2012 suggests that, in the Union, both public investment and current public expenditure are more pro-cyclical than they are in other countries. In particular, public investment contracts more in"bad times"than it increases in"good times"in order to absorb negative shocks to the budget in the context of strict fiscal convergence criteria. The asymmetric response of public investment to shocks could thus be a reason for the relatively low levels of infrastructure in the Union. Comparisons with earlier periods suggest that publicinvestment has become pro-cyclical since the introduction of the fiscal convergence criteria in 1994. Moreover, the shocks that affect Union member countries appear to be highly idiosyncratic and thus difficult to mitigate by the Union's common monetary policy. The pro-cyclicality of public expenditure and the high asymmetry of shocks that affect Union member countries justify exploring options for greater counter-cyclicality of rules-based fiscal frameworks and for risk-sharing.
    Keywords: Public Sector Expenditure Policy,Debt Markets,Economic Stabilization,Fiscal Adjustment,Access to Finance
    Date: 2013–08–01
    URL: http://d.repec.org/n?u=RePEc:wbk:wbrwps:6562&r=pbe
  18. By: A.P.Thirlwall
    Abstract: The paper looks at the latest evidence of what has been happening to regional disparities in per capita income (measured as Gross State Domestic Product per capita) in India over the first decade of the twenty first century (1999/00 to 2010/11) by estimating cross section equations for unconditional and conditional beta convergence and sigma convergence across thirty two regions (twenty-eight States and four Union Territories). There is no evidence of unconditional convergence, but weak evidence of conditional convergence controlling for population growth; credit growth; male literacy; the share of agriculture in State GDP, and State expenditure as a share of State GDP. Sigma divergence has increased continuously, except among the poorest States.
    Keywords: Regional Growth; India; Convergence/Divergence
    JEL: O47 O53 R11
    Date: 2013–08
    URL: http://d.repec.org/n?u=RePEc:ukc:ukcedp:1313&r=pbe
  19. By: Riyana Miranti; Yogi Vidyattama; Erick Hansnata; Rebecca Cassells; Alan Duncan
    Abstract: As one of the world’s largest emerging economies, Indonesia has experienced rapid economic growth and substantial reduction of poverty over the past three decades, particularly prior to the 1997-98 Asian Financial Crisis. After the crisis, Indonesia entered a new development phase that saw the fall of the Suharto government and new governance which moved highly centralised policies and powers towards a decentralised process. This research report analyses economic and social patterns and trends of poverty and inequality in Indonesia with a particular focus on the decentralisation period from 2001 to 2010.The Indonesian political and economic environment has changed significantly during this period and this had implications for individual wellbeing, regional economic prosperity and national economic growth. The report finds that in general, absolute poverty rates have continued to decline during the decentralisation period although the reduction has not been as strong as it was prior to the Asian economic crisis. In contrast, consumption inequality has increased during the same period. New estimates of growth and inequality elasticity of poverty suggest that this rising inequality has been offsetting the positive benefits of consumption growth on poverty.<BR>En tant que l'une des plus grandes économies émergentes du monde, l'Indonésie a connu une croissance économique rapide et une réduction substantielle de la pauvreté au cours des trois dernières décennies, en particulier avant la crise financière asiatique de 1997-1998. Après cette crise, l'Indonésie est entrée dans une nouvelle phase de développement qui a vu la chute du gouvernement Suharto, et qui a connu une nouvelle gouvernance délaçant des politiques et des pouvoirs fortement centralisés vers un processus décentralisé. Ce rapport analyse les caractéristiques et tendances économiques et sociales de la pauvreté et de l'inégalité en Indonésie, avec un accent particulier sur la période de décentralisation de 2001 à 2010. L’environnement politique et économique indonésien a considérablement changé au cours de cette période. Cela a eu des répercussions sur le bien-être individuel, la prospérité économique régionale et à la croissance économique nationale. Le rapport constate qu'en général, les taux de pauvreté absolue ont continué à baisser au cours de la période de décentralisation, mais la baisse n'a pas été aussi forte qu'elle l'avait été avant la crise économique asiatique. En revanche, les inégalités (mesurées par la consommation) ont augmenté durant la même période. Des nouvelles estimations de la croissance et de l'élasticité de l'inégalité de la pauvreté suggèrent que cette inégalité croissante a compensé les effets positifs de la croissance de la consommation sur la pauvreté.
    Keywords: poverty, inequality, regional disparities, poverty alleviation strategy
    JEL: I32 I38 R12
    Date: 2013–07–23
    URL: http://d.repec.org/n?u=RePEc:oec:elsaab:148-en&r=pbe

This nep-pbe issue is ©2013 by Keunjae Lee. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at http://nep.repec.org. For comments please write to the director of NEP, Marco Novarese at <director@nep.repec.org>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.