Taxation and inequality in developing countries - Lessons from the recent experience of Latin America

This paper aims to advance understanding about the relationship between taxation and inequality in developing countries, focusing on the recent experience of Latin America. Although the tax system was regressive in the 1990s, tax changes promoted equality in the first decade of the 2000s. In particular, the increasing contribution of direct taxes with respect to indirect taxes promoted the progressivity of the tax system and contributed to the reduction of inequality. Yet, the effectiveness of taxation in promoting equality in Latin America is still limited by several factors such as the low average tax revenue as percentage of gross domestic product, the relative high contribution of indirect taxes, the inability to tax top incomes, and the low contribution of taxes on property

Inequality, Distributive Beliefs and Protests: A Recent Story from Latin America

This paper analyses the role of perceptions of inequality and distributive beliefs in motivating people to engage in protests. The paper focuses on the case of Latin America, where an interesting paradox has been observed: despite considerable reductions in inequality, most countries in Latin America have experienced increases in protests and civil unrest in the last decade. In order to understand this paradox, we analyse the relationship between inequality and protests in recent years in Latin America, using micro-level data on individual participation in protests in 2010, 2012 and 2014. The results show that civil protests are driven by distributive beliefs and not by levels of inequality because individual judgements and reactions are based on own perceptions of inequality that may or may not match absolute levels of inequality. The results also point to the important role of government policy in affecting perceptions of inequality and ensuring social and political stability

Redistribution, inequality and political participation: Evidence from Mexico during the 2008 financial crisis

This paper explores the relationship between a large government cash transfer programme, changes in inequality, and political participation in Mexico. The results show that increases in the coverage of the programme during the 2008 financial crisis resulted in greater individual participation in the last presidential elections and in higher individual propensity to vote, particularly for the incumbent party. The programme was particularly effective in increasing political participation among rural and indigenous groups, and had a mitigating effect on participation in presidential elections and the propensity to vote among the urban unskilled. The programme resulted also in reductions in individual participation in protests. Further analysis suggests that these changes were driven by redistributive gains following the changes to the cash transfer programme

Inequality, Power and Participation – Revisiting the Links

Drawing on the contributions from the World Social Science Report 2016, Challenging Inequalities: Pathways to a Just World, this article examines the relationship between economic inequality and political participation. In particular, using the lens of the ‘power cube’ approach (www.powercube.net), we argue that understanding the impact of inequality on political participation requires moving beyond the study of its impact on more conventional forms of participation found in voting and ‘voice’ through established or formal democratic processes. Indeed, this relationship is also influenced by hidden and invisible forms of power, at multiple levels from the local to the global, which affect the rules of the game as well as individuals’ aspiration to participate, shaping whether, where and how citizens engage at all. Despite the power of inequality to shape its own consensus, recent evidence also points to the emergence of levels and forms of resistance to inequality outside of traditional channels of participation, which in turn help to expand and prefigure notions of what the new possibilities of change might be. Exploring these dynamics, the article concludes with a brief reflection on possible lessons for activists, policymakers and scholars working to understand, unravel and challenge the knotty intersections of inequality, power and participation

A New Fiscal Pact, Tax Policy Changes and Income Inequality

The paper analyses the changes in tax policy, tax/GDP ratios, tax incidence and income inequality which have taken place in Latin America during the last decade against the background of the changes observed in these variables during the liberal years of the 1980s and 1990s. The paper argues that the recent tax policy changes and a favourable external environment led to an increase of about three points in the regional tax/GDP ratio, that such increase in taxation took place in a slightly or substantially more progressive way than in the past, that the Gini coefficient of the distribution of household income improved on average by 0.4-0.8 points, and that, as a result, redistribution via taxation improved (especially in the Southern Cone) in relation to the 1990s thanks to greater reliance on direct taxes and a reduction in excises. However, in the mid-late 2000s taxation remains unequalizing in about a third of the countries of the region, especially in Central America. The paper concludes by offering recommendations on how the new fiscal pact evolving in the region can be strengthened to improve the redistributive effect of taxation in the years ahead.tax policy, tax incidence, income inequality, redistribution, fiscal exchange, Latin America

Spatial inequality during the COVID-19 pandemic in Africa using night-time lights data

In this paper, we study the evolution of spatial inequality during the recent COVID-19 pandemic in Africa and assess if there is any association between the outbreak of the health crisis, the strictness of policy restrictions and the changes observed in spatial inequality. Using remotely sensed night time lights data, we find that spatial inequality decreased after the COVID-19 outbreak. Yet, there are huge differences within and between countries. Spatial inequality decreased in Southern and Northern African countries while it increased in Central African countries. Spatial inequality mainly decreased in countries implementing more stringent measures but also in those areas that were richer before the outbreak of the COVID-19 pandemic

Spatial inequality during the COVID-19 pandemic in Africa using night-time lights data

In this paper, we study the evolution of spatial inequality during the recent COVID-19 pandemic in Africa and assess if there is any association between the outbreak of the health crisis, the strictness of policy restrictions and the changes observed in spatial inequality. Using remotely sensed night time lights data, we find that spatial inequality decreased after the COVID-19 outbreak. Yet, there are huge differences within and between countries. Spatial inequality decreased in Southern and Northern African countries while it increased in Central African countries. Spatial inequality mainly decreased in countries implementing more stringent measures but also in those areas that were richer before the outbreak of the COVID-19 pandemic

The Competing Influences of Initial Depressive Symptomatology and Early Alliance on Early Outcome: A Preliminary Study

We examined 40 psychotherapies, some delivered in combination with pharma-cotherapy, which were all conducted by cognitive behavioral or psychodynamically oriented therapists in a general hospital center for the treatment of light to moder-ate depressive disorders. Our goal was to examine the relationship between early outcome (defined as change in Beck Depression Inventory scores between sessions 2 and 15) and early therapy alliance (as measured at sessions 1 to 5 by the Working Alliance Inventory). We also wanted to concurrently examine the effect of initial depressive symptomatology (BDI at session 2) on early outcome. For the entire sample, both early alliance and initial depressive symptomatology were found to significantly correlate with outcome, the latter more strongly so. However, after di-viding the patient sample into subgroups based on different initial levels of depres-sion, early outcome for patients with depression of intermediate severity was found to be better predicted by early alliance than by initial depression. These results sug-gest that there may be a patient subgroup for whom a good early alliance optimally mitigates the self-perpetuating action of initial depression