Learning from the

Olivier Bargain, H. Xavier Jara, Prudence Magejo () and Miracle Benhura ()
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Prudence Magejo: University of the Witwatersrand, Johannesburg
Miracle Benhura: University of the Witwatersrand, Johannesburg

No 12017, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Redistributive systems in Africa are still in their infancy but are constantly expanding in order to finance increasing public spending. This paper aims at characterizing the redistributive potential of six African countries: Ghana, Zambia, Mozambique, Tanzania, Ethiopia and South Africa. These countries show contrasted situations in terms of income distribution. We assess the role of tax-benefit systems to explain these differences. Using newly developed tax-benefit microsimulations for all six countries, we produce counterfactual simulations whereby the system of the most (least) redistributive country is applied to the population of all other countries. In this way, we can decompose the total country difference in income distribution between the contribution of tax-benefit policies versus the contribution of other factors (market income distributions, demographics, etc.). This analysis contributes to the recent literature on the redistributive role of socio-fiscal policies in developing countries and highlights the role of microsimulation techniques to characterize how different African countries can learn from each other to improve social protection and reduce inequality.

Keywords: poverty; tax-benefit policy; microsimulation; inequality; Africa (search for similar items in EconPapers)
JEL-codes: H23 H53 I32 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2018-12
New Economics Papers: this item is included in nep-afr, nep-cmp, nep-pbe and nep-pub
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Published - published as 'Income Distribution and the Potential of Redistributive Systems in Africa: A Decomposition Approach ' in: Journal of African Economies, 2022, 31 (4), 293 - 328

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