Testing for Pro-Poorness of Growth through the Tax System: The Mexican Case
DOI:
https://doi.org/10.6000/1929-7092.2016.05.09Keywords:
Fiscal policy, pro-poor regional growth, redistribution, progressivityAbstract
This research provides a detailed examination of the redistributive effect achieved by the tax system including total taxes and cash transfers targeting the contributors and households in the period 2002-2008-2014 for the Mexican regions and the country. We measure the impact on income growth through the tax system according to each fiscal rules for the corresponding years using pre and post fiscal conditions. We answer the next question: considering the economic growth on per capita incomes in the Mexican states, will the impact of the Mexican tax system improve income distribution? That is, by all means pro-poor? Our methodology allows to detect if taxes and benefits can really induce an improvement of income growth on the regions captured by its wellbeing and economic growth conditions. We outlined relevant theoretical issues on public fiscal policies concerning this work and lastly, we proceed with an empirical application to develop some recommendations for the Mexican fiscal policy system.
References
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Araar, Abdelkrim and Jean-Yves Duclos. 2013. User manual DASP version 2.3. Distributive Analysis Stata Package, PEP, CIRPÉE and World Bank, Université Laval, June.
Araar, Abdelkrim, Jean-Yves Duclos, Mathieu Audet, and Paul Makdissi. 2009. “Testing For ProPoorness Of Growth, With An Application To Mexico”. Review of Income and Wealth, 55: 853–881.
http://dx.doi.org/10.1111/j.1475-4991.2009.00357.x
Bibi, Sami and Jean-Yves Duclos. 2010. “A Comparison of The Poverty Impact Of Transfers, Taxes And Market Income Across Five OECD Countries”. Bulletin of Economic Research, 62: 387–406.
http://dx.doi.org/10.1111/j.1467-8586.2009.00339.x
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http://dx.doi.org/10.1023/A:1005271812684
Claus, Iris, Jorge Martinez-Vazquez, and Violeta Vulovic. 2013. “Coping with Rising Inequality in Asia: How Effective Are Fiscal Policies?” Asian Economic Papers, 12: 1–33.
http://dx.doi.org/10.1162/ASEP_a_00232
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Davidson, Russell and Jean-Yves Duclos. 1997. “Statistical Inference for the Measurement of the Incidence of Taxes and Transfers”. Econometrica, 65: 1453–65.
http://dx.doi.org/10.2307/2171744
Deaton, Angus. 1998. The Analysis of Household Surveys: A Microeconometric Approach to Development Policy, John Hopkins University Press.
Duclos, Jean-Yves. 2009. “What is Pro-Poor?” Social Choice and Welfare, 32: 37–58.
http://dx.doi.org/10.1007/s00355-008-0308-x
Duclos, Jean-Yves and Abdelkrim Araar. 2006. Poverty and Equity Measurement, Policy, and Estimation with DAD, Berlin and Ottawa: Springer and IDRC.
Duclos, Jean-Yves, Paul Makdissi, and Abdelkrim Araar. 2014. “Pro-poor indirect tax reforms, with an application to Mexico”. International Tax and Public Finance, 21: 87–118.
http://dx.doi.org/10.1007/s10797-012-9260-x
German-Soto, Vicente. 2005. “Generación del producto interno bruto mexicano por entidad federativa, 1940-1992”. El Trimestre Económico, 72(3): 617–653.
German-Soto, Vicente. 2014. Population Statistics by Mexican federal entity. Selected works, Universidad Autónoma de Coahuila. http://works.bepress.com/vicente_german_soto/54/
Huesca, Luis and Abdelkrim Araar. 2016. “Comparison of the Tax System Progressivity Over Time: Theory and Application with Mexican Data”. Estudios Económicos, 31(1): 3-45.
INEGI. 2015a. “Encuesta Nacional de Ingresos y Gastos de los Hogares”. Microdata various years available at: http://inegi.org.mx, INEGI.
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Kakwani, Nanak and Ernesto M. Pernia. 2000. “What is Pro-poor Growth?” Asian Development Review, 16: 1–22.
Lustig, Nora, Carola Pessino, and John Scott. 2014. “The Impact of Taxes and Social Spending on Inequality and Poverty in Argentina, Bolivia, Brazil, Mexico, Peru, and Uruguay: Introduction to the Special Issue”. Public Finance Review, 42: 287–303.
http://dx.doi.org/10.1177/1091142113506931
Musgrave, Richard. 1990. “Horizontal Equity, Once More”. National Tax Journal, 43: 113– 122.
Pechman, Joseph A., and Benjamin A. Okner. 1974. Who Bears the Tax Burden? Brookings Institution, Washington.
Scott, John. 2014. “Redistributive Impact and Efficiency of Mexico’s Fiscal System”. Public Finance Review, 42: 368–390.
http://dx.doi.org/10.1177/1091142113497394
Teruel, Graciela, Luis Rubalcava, and Alicia Santana. 2005. Escalas de Equivalencia para México, Secretaría de Desarrollo Social-Serie Documentos de Investigación.
Wagstaff, Adam and Eddy Van Doorslaer. 2001. “What Makes the Personal Income Tax Progressive? A Comparative Analysis for Fifteen OECD Countries”. International Tax and Public Finance, 8: 299-316.
Araar, Abdelkrim and Jean-Yves Duclos. 2013. User manual DASP version 2.3. Distributive Analysis Stata Package, PEP, CIRPÉE and World Bank, Université Laval, June.
Araar, Abdelkrim, Jean-Yves Duclos, Mathieu Audet, and Paul Makdissi. 2009. “Testing For ProPoorness Of Growth, With An Application To Mexico”. Review of Income and Wealth, 55: 853–881.
http://dx.doi.org/10.1111/j.1475-4991.2009.00357.x
Bibi, Sami and Jean-Yves Duclos. 2010. “A Comparison of The Poverty Impact Of Transfers, Taxes And Market Income Across Five OECD Countries”. Bulletin of Economic Research, 62: 387–406.
http://dx.doi.org/10.1111/j.1467-8586.2009.00339.x
Bird, Richard. 1995. “Tax Policy: Past, Present, and Future”. Canadian Tax Journal, 43(5): 1039-1054.
Bird, Richard and Pierre-Pascal Gendron. 2011. Equity and the Informal Sector. In: The VAT in Developing and Transitional Countries, New York, Cambridge University Press., 2nd re-impression ed.
Buchanan, James M. and Richard A. Musgrave. 2001. “Public Finance and Public Choice: Two Contrasting Visions of the State”. Public Choice, 106: 196–199.
http://dx.doi.org/10.1023/A:1005271812684
Claus, Iris, Jorge Martinez-Vazquez, and Violeta Vulovic. 2013. “Coping with Rising Inequality in Asia: How Effective Are Fiscal Policies?” Asian Economic Papers, 12: 1–33.
http://dx.doi.org/10.1162/ASEP_a_00232
CONEVAL. 2015. “Informe de Pobreza Multidimensional en Mexico 2014”. Informe de Evaluación 2015:1, CONEVAL.
CONEVAL. 2009. “Informe de Pobreza Multidimensional en Mexico 2008”. Informe de Evaluación 2009:1, CONEVAL.
Davidson, Russell and Jean-Yves Duclos. 1997. “Statistical Inference for the Measurement of the Incidence of Taxes and Transfers”. Econometrica, 65: 1453–65.
http://dx.doi.org/10.2307/2171744
Deaton, Angus. 1998. The Analysis of Household Surveys: A Microeconometric Approach to Development Policy, John Hopkins University Press.
Duclos, Jean-Yves. 2009. “What is Pro-Poor?” Social Choice and Welfare, 32: 37–58.
http://dx.doi.org/10.1007/s00355-008-0308-x
Duclos, Jean-Yves and Abdelkrim Araar. 2006. Poverty and Equity Measurement, Policy, and Estimation with DAD, Berlin and Ottawa: Springer and IDRC.
Duclos, Jean-Yves, Paul Makdissi, and Abdelkrim Araar. 2014. “Pro-poor indirect tax reforms, with an application to Mexico”. International Tax and Public Finance, 21: 87–118.
http://dx.doi.org/10.1007/s10797-012-9260-x
German-Soto, Vicente. 2005. “Generación del producto interno bruto mexicano por entidad federativa, 1940-1992”. El Trimestre Económico, 72(3): 617–653.
German-Soto, Vicente. 2014. Population Statistics by Mexican federal entity. Selected works, Universidad Autónoma de Coahuila. http://works.bepress.com/vicente_german_soto/54/
Huesca, Luis and Abdelkrim Araar. 2016. “Comparison of the Tax System Progressivity Over Time: Theory and Application with Mexican Data”. Estudios Económicos, 31(1): 3-45.
INEGI. 2015a. “Encuesta Nacional de Ingresos y Gastos de los Hogares”. Microdata various years available at: http://inegi.org.mx, INEGI.
INEGI. 2015b. Database of GDP for Mexican states 2002-2015. Sistema de Cuentas Nacionales.
Kakwani, Nanak and Ernesto M. Pernia. 2000. “What is Pro-poor Growth?” Asian Development Review, 16: 1–22.
Lustig, Nora, Carola Pessino, and John Scott. 2014. “The Impact of Taxes and Social Spending on Inequality and Poverty in Argentina, Bolivia, Brazil, Mexico, Peru, and Uruguay: Introduction to the Special Issue”. Public Finance Review, 42: 287–303.
http://dx.doi.org/10.1177/1091142113506931
Musgrave, Richard. 1990. “Horizontal Equity, Once More”. National Tax Journal, 43: 113– 122.
Pechman, Joseph A., and Benjamin A. Okner. 1974. Who Bears the Tax Burden? Brookings Institution, Washington.
Scott, John. 2014. “Redistributive Impact and Efficiency of Mexico’s Fiscal System”. Public Finance Review, 42: 368–390.
http://dx.doi.org/10.1177/1091142113497394
Teruel, Graciela, Luis Rubalcava, and Alicia Santana. 2005. Escalas de Equivalencia para México, Secretaría de Desarrollo Social-Serie Documentos de Investigación.
Wagstaff, Adam and Eddy Van Doorslaer. 2001. “What Makes the Personal Income Tax Progressive? A Comparative Analysis for Fifteen OECD Countries”. International Tax and Public Finance, 8: 299-316.
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Published
2016-05-06
How to Cite
Huesca, L., & Llamas, L. (2016). Testing for Pro-Poorness of Growth through the Tax System: The Mexican Case. Journal of Reviews on Global Economics, 5, 101–115. https://doi.org/10.6000/1929-7092.2016.05.09
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Section
Special Issues | Economic Growth and Convergence: Analyses for the Mexican States
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