CHAPTER 15: The Effects of Taxation and Spending on Inequality and Poverty
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Table 15.4 State Spending on Education, Peru, 2000
Percent of spending
Sorted by income/capita Spending/ income (%)
Sorted by expenditure/capita Spending/ expend. (%) All Peru (2000) By decile Decile 1 (poorest) Decile 2 Decile 3 Decile 4 Decile 5 Decile 6 Decile 7 Decile 8 Decile 9 Decile 10 (richest) By region Lima/Callao Amazon (4 depts.) Rest of Peru
Spending/ income (%)
3.6
3.0
100.0
3.0
15.6 9.8 7.6 7.0 5.4 4.8 4.0 3.5 2.9 1.3
11.4 6.0 5.8 5.0 4.2 3.7 3.4 2.8 2.7 1.2
7.9 8.1 8.3 9.5 9.0 9.8 10.1 11.0 12.7 13.7
34.7 13.5 8.3 6.2 4.7 4.4 3.6 3.0 2.2 1.0
2.2 4.5 4.8
1.8 3.9 4.0
27.2 15.7 57.1
1.8 3.9 4.0
Source: Based on ENNIV-2000. Haughton 2005.
than to rich households. In absolute terms, however, the share of all education spending going to those in the poorer deciles is substantially smaller than that going to households in the top deciles (“per capita regressive�). The situation is summarized in figure 15.4: the concentration curve for education spending shows much greater equality that overall expenditure per capita, but it is still below the line of perfect equality. Further insight into the situation comes from figure 15.5, which examines the incidence of education spending overall (panels A and B) and by subsector. Spending on pre-K and primary education are clearly progressive, with poorer households receiving substantially more than richer ones; spending on secondary education is roughly proportional, and spending on higher education appears to be regressive. A similar pattern is found in many countries (see van de Walle and Nead 1995), as table 15.5 shows.
Issues in Benefit Incidence Analysis The techniques of tax and benefit incidence analysis should be included in the toolkit of all poverty analysts, but this analysis also has its limitations. In this section, we consider six issues that are still topics for debate.
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