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The Distributional Impact of Fiscal Policy in Honduras

The Distributional Impact of Fiscal Policy in Honduras by David Locke Newhouse
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This paper uses household survey data to estimate the incidence of tax and spending programs in Honduras. Any such exercise is fraught with difficulty, so our simplifying assumptions are carefully explained. Rather than look at tax and spending completely independently, we evaluate net incidence of major programs-such as health care and pensions-to get a more holistic evaluation of redistribution. Our results show that fiscal policy is, on balance, progressive, but that there is room for significant improvement. In particular, energy subsidies, university education and public pension programs provide disproportionate benefits to higher-income households.
International Monetary Fund; July 2008
20 pages; ISBN 9781452745046
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Title: The Distributional Impact of Fiscal Policy in Honduras
Author: David Locke Newhouse; Irene Yackovlev; Robert Gillingham