Roger Thayer Stone Center For Latin American Studies

Tulane University

CGD Global Prosperity Wonkcast featuring Nora Lustig

Many governments try to reduce poverty and inequality through a mixture of taxes, transfers, and public services. Individual policies, such as taxation or cash transfers, are frequently evaluated on how well they address these goals. But the overall impact of a country’s fiscal policy package on poverty and inequality has rarely been subject to systematic analysis – until now.

Nora Lustig, a non-resident fellow at CGD and a professor at Tulane, has set out to close this gap with the Commitment to Equity Assessment or CEQ. I invited Nora to tell us about this new endeavor.

Nora explains that the CEQ is both a virtual toolbox – that is, a common analytical approach – and a global network of researchers who are applying this approach in a series of country case studies. CEQ partner institutions include Tulane University, the Inter-American Dialogue, and now CGD, which is helping to bring the approach and the case study findings to a broad international audience. These materials will be collected on a CEQ landing page that is part of the Center‘€™s ongoing work on inequality.

The assessment initially focused on Latin America, the region Nora knows best. But with encouragement and funding from the World Bank and the Bill and Melinda Gates Foundation, the CEQ is growing rapidly to include countries in other regions, among them South Africa, Tanzania, Ghana, Tunisia, Armenia, Jordan, Sri Lanka, and Indonesia.

What exactly can we learn from such assessments? Nora offers Brazil as an example. Brazil is reputed to be well-run and pro-poor in its policies, especially for direct taxes and cash transfer programs such as Bolsa Familia. However, throwing consumption taxes into the mix considerably darkens the picture of equity. Because Brazil lays heavy taxes on the goods that the poor purchase frequently, such as rice and beans, the CEQ analysis shows that overall taxation policies actually worsen poverty. (Interestingly, they do not worsen inequality, listen to the Wonkcast or read this new CEQ/CGD paper to find out why!)

I also ask Nora whether reducing the tax burden on the poor and near poor, as the CEQ analysis suggests should be done, may have reduced incentives for these people to hold their governments accountable, thereby undermining the quality of governance. Listen to the Wonkcast for Nora‘€™s intriguing reply, and examples of countries where the CEQ is already beginning to shape the policy dialogue.

My thanks to Kristina Wilson for recording and editing the Wonkcast, as well as providing a first draft of this blog post.

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Central America: People and the Environment Asynchronous Institute

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Register now for the ASYNCHRONOUS COURSE which opens up in July
Please note, the synchronous blended institute taking place June 14 – 25 is no longer accepting registrants.

This summer educator institute is the third institute in a series being offered by Tulane University, The University of Georgia and Vanderbilt University. This series of institutes is designed to enhance the presence of Central America in the K-12 classroom. Each year, participants engage with presenters, resources and other K-12 colleagues to explore diverse topics in Central America with a focus on people and the environment. It is not required to have participated in past institutes to join us.

The Stone Center for Latin American Studies at Tulane University is excited to host and coordinate this year’s institute. Tulane University and New Orleans are both unique and important places to explore the deep connections to Central America with a focus on people and environment. With presentations by leading historians and sociologists on Central America, environment and race we are excited to share the work and resources from presenters as well as the unique resources at Tulane.

YOU MAY REGISTER FOR THE ASYNCHRONOUS COURSE WHICH OPENS UP IN JULY

NOW REGISTERING FOR THE ASYNCHRONOUS INSTITUTE For more information, please email dwolteri@tulane.edu or call 504.865.5164. Space is limited.