Income Distribution and Tax and Government Social Spending Policies in Developing Countries

This paper reviews income distribution in developing (and transition) countries in recent decades. On average, before-tax income distribution in developing countries is less unequal than in industrial countries. However, unlike industrial countries, developing countries in general have not been able to use tax and transfer policies effectively to reduce income inequality. During the 1980s and 1990s, many developing countries experienced an increase in income inequality. The government health care and primary and secondary education programs in developing countries are not well targeted, but their incidence tends to be progressive.Income distribution;Government expenditures;Developing countries;household income, direct taxes, indirect taxes, tax incidence, tax system, tax reform, benefit incidence, tax income, tax incomes, personal income tax, incidence analysis, tax reforms, tax structure, tax systems, income taxes, incidence of taxes, distributional implications, income groups, income distribution data, payroll taxes, effective tax rates, equilibrium analysis, distribution of income, indirect tax, tax evasion, cash transfer, general equilibrium analysis, fiscal policy, cash transfers, direct tax, income data, benefit incidence analysis, personal income taxes, tax administration, payroll tax, tax burdens, corporate taxes, distributional effects, inequality estimates, fiscal incidence, value-added taxes, wealth taxes, partial equilibrium, consumption taxes, progressive tax, household expenditure, amount of tax, tax instruments, general equilibrium approach, impact of tax, higher income, progressive taxes, behavioral responses, indirect taxation, reform package, property tax, partial equilibrium analysis, input-output, household surveys, computable general equilibrium, personal taxes, poverty line, effects of taxes, estimating tax incidence, sales tax, reform efforts, income tax net, major tax reform, household data, tax structures, distributional analysis, tax treatment, marginal tax rates, property taxes, lower tax rates, household consumption, income growth, vat rate, tax rate reductions, federal taxes, income class, export taxes, tax measures, incidence of poverty, redistributive taxation, tax reform efforts, tax revenues, high tax rates, tax policy reforms, international food policy research institute, tax exemptions, social safety net