Fiscal policy and spatial inequality in Latin America and beyond

We study the theoretical and empirical links between fiscal policy and spatial inequality, with a non-exclusive focus on Latin American countries. We outline the two main dimensions of fiscal policy vis-à-vis economic inequality, and show how these can be used to analyze specific policy measures. We examine why fiscal policies so often fail to have the ameliorative effects that theory predicts on spatial inequality, and explore ways to make policy tools more effective. We explore the relation between fiscal policies and spatial inequalities in three case studies: Mexico, Brazil and Argentina. Lastly, we examine the effects of decentralization on spatial inequality in Bolivia