Fiscal Incidence in Ghana

20 Pages Posted: 13 Nov 2017

See all articles by Stephen D. Younger

Stephen D. Younger

Tulane University - CEQ Institute

Eric Osei‐Assibey

University of Ghana

Felix Oppong

World Bank

Date Written: November 2017

Abstract

We use methods developed by the Commitment to Equity Institute to assess the effects of government taxation, social spending and indirect subsidies on poverty and inequality in Ghana. We also simulate several policy reforms to assess their distributional consequences. Results show that, although the country has some very progressive taxes and well‐targeted expenditures, the extent of fiscal redistribution is small, but about what one would expect given Ghana's income level and relatively low initial inequality. Results for poverty reduction are less encouraging: were it not for the in‐kind benefits from health and education spending, the overall effect of government spending and taxation would actually increase poverty in Ghana. Eliminating energy subsidies and at the same time reallocating part of the savings to well‐targeted transfer programs could lower the fiscal deficit while reducing inequality and protecting the poor.

Suggested Citation

Younger, Stephen D. and Osei‐Assibey, Eric and Oppong, Felix, Fiscal Incidence in Ghana (November 2017). Review of Development Economics, Vol. 21, Issue 4, pp. e47-e66, 2017, Available at SSRN: https://ssrn.com/abstract=3069184 or http://dx.doi.org/10.1111/rode.12299

Stephen D. Younger (Contact Author)

Tulane University - CEQ Institute ( email )

6823 St Charles Ave
New Orleans, LA 70118
United States

Eric Osei‐Assibey

University of Ghana

PO Box 25
Legon, Accra LG
Ghana

Felix Oppong

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

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