Perceptions of inequality: perspectives of national policy makers Figure 6.9. Perceived relevance of selected policy measures to reduce income inequality SUPPORT QUINTILES
Introduction or increase of minimum wages
Asset redistribution (e.g., land reform)
35%
Tax incentives for FDI in marginalized regions Increase progressivity of income taxation
Employment guarantee schemes
55%
59%
42%
41%
Subsidies to factors of production for SMEs
58%
Consumer subsidies
31%
66%
59%
43%
Taxation of financial transactions
CCTs
51%
74%
63%
Strengthen collective bargaining
Subsidies to factors of production in the agricultural sector
57%
62%
56% Average Support
Reduce tax evasion
61%
71%
81%
as a fairly relevant way to deal with the issue. This policy is in fact seen as ‘necessary’ or ‘highly necessary’ by 58 percent of the interviewed policy makers (2 points above average) and ranks number five in terms of support among the 12 policy options presented to the survey respondents. Figure 6.9 illustrates the support received by each of the 12 proposed policy measures, allocating them in five quintiles centred on the average support level of 56 percent. What kind of conclusions can be drawn from the above considerations? To summarize and link the discussion in this section to the overall framework of the report, it could be said that the most popular policies among policy makers seem to be either of two kinds: 1) policies that are seen as reducing inequality in the secondary distribution of income without having a significant distortive effect on the workings of the market (i.e., cash transfers rather than interventions on the taxation system or consumer subsidies); and 2) policies that can reduce inequality in the primary distribution of income by providing greater access to income from capital (mainly through support to small-scale entrepreneurship). Labour market interventions are also seen as relevant, but not necessarily as part of the top-priority group of policy measures. Interventions in the structure of the taxation system are definitively not among the most popular ones among the interviewed policy makers, but there is a strong consensus on the critical importance of reducing tax evasion.
212 Humanity Divided: Confronting Inequality in Developing Countries