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THE REDISTRIBUTIVE IMPACT OF FISCAL HUMANITY DIVIDED: Confronting inequality in Developing Countries

THE REDISTRIBUTIVE IMPACT OF FISCAL
POLICY IN DEVELOPING COUNTRIES
-20%
-10%
0%
10%
20%
30%
40%
50%
Upper-middle Lower-middle Low
ChangeinInequality(%)
Income group
Change in the Gini Index of Income
Inequality Post-Taxes and Transfers
(Late 2000s)
• In the majority of countries, taxes
and transfers had an inequality
reducing effect.
• The average redistributive impact
of taxes and transfers was 11% in
Upper-Middle Income countries, 4%
in Lower-Middle and 3% in Low-
Income countries.
• Yet, country experiences vary
widely. Even among low and lower
middle income countries there are
cases where taxes and transfer
reduce inequality by more than
30%
Source: UNDP, Humanity Divided

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