Wealth redistribution tracked in Latin America

November 4, 2013 11:00 AM

Nick Marinello

How effective are the fiscal policies of a nation in reducing poverty and promoting economic equality? The analysis of how governments collect taxes and then redistribute money through social spending and subsidies is central to an ongoing, international project led by Tulane University economist Nora Lustig, the Samuel Z. Stone Professor of Latin American Economics.

Nora Lustig

Economist Nora Lustig leads the Commitment to Equity project that tracks the effectiveness of Latin American nations in reducing poverty and promoting equity. (Photo by Paula Burch-Celentano)

The project is called Commitment to Equity (CEQ), and for five years Lustig and her team have tracked fiscal policies in a number of Latin American countries.

“We want to know who are the people bearing most of the burden of taxes and who are the people getting the most benefits through government transfers and public spending on education and health,” says Lustig.

On Oct. 17 and 18, Tulane hosted a conference in which authors presented papers on 12 Latin American countries: Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, El Salvador, Guatemala, Mexico, Paraguay, Peru and Uruguay, and the United States.

Despite the tendency to think of Latin America as a homogeneous entity, the papers describe quite the opposite.

“We find a lot of diversity in terms of redistribution and poverty reduction that different governments are able to achieve,” says Lustig.

Studies of four additional countries are in their initial stage, and Lustig expects the project to eventually comprise research on the 17 continental Latin American countries and the Dominican Republic.

“My ultimate aim is to bring the CEQ results into the policy debate and influence the policy decisions taken in these countries,” says Lustig, who adds the project already has high-level entry points with the administrations of several Latin American nations.  The CEQ method is also being applied in other parts of the world in a project with the World Bank.

CEQ is a joint project of and Center for Inter-American Policy and Research and the Department of Economics at Tulane University and the Inter-American Dialogue in Washington, D.C.

Tulane University, New Orleans, LA 70118 504-865-5000 website@tulane.edu