On the redistributive efficiency of fiscal policy

This article analyses the redistributive efficiency of public spending and taxation in a panel of 28 OECD economies during the period 1995-2010. In order to explore how redistribution is achieved through fiscal policies, a two-stage approach is applied. First, we evaluate the redistributive efficiency of public spending and taxation by using Data Envelopment Analysis (DEA) and obtain considerable variation in redistributive efficiency scores across countries. Second, we use panel regression analysis to identify the determinants of these differences and reveal the crucial role of factors capturing the capacity of public officials to design and implement redistributive policies, and political economy factors potentially affecting the redistributive profile of fiscal policies