Impact of Fiscal Policy on Inequality and Poverty in the Arab Republic of Egypt

41 Pages Posted: 19 Apr 2019

See all articles by Gabriel Lara Ibarra

Gabriel Lara Ibarra

The World Bank - Poverty and Equity Global Practice

Nistha Sinha

World Bank

Rana Nayer Safwat Fayez

World Bank - Poverty and Equity Global Practice

Jon Robbert Jellema

The Commitment to Equity Institute

Date Written: April 18, 2019

Abstract

This study assesses the redistributive impact of fiscal policy ?? including expenditures and taxation ?? in the Arab Republic of Egypt. Using a broadly applied methodology, a fiscal incidence analysis is conducted using survey and government data for fiscal year 2015. Evidence shows that Egyptian fiscal policy reduces income inequality, and that among individual fiscal programs, the largest reduction is due to public expenditures on the primary education system. Compared with similar countries, Egypt's overall fiscal policy placed it in the median of the distribution of inequality reduction. Fiscal policies in Egypt also led to a decrease in poverty, mostly from the flagship Tamween program. Poverty and inequality could be reduced more effectively if the country would shift away from spending on untargeted energy subsidies to more targeted transfers. The large gap between the government's expenditures and revenues helps explain the positive outcomes on poverty and inequality but poses challenges in the long term.

Suggested Citation

Lara Ibarra, Gabriel and Sinha, Nistha and Fayez, Rana Nayer Safwat and Jellema, Jon Robbert, Impact of Fiscal Policy on Inequality and Poverty in the Arab Republic of Egypt (April 18, 2019). World Bank Policy Research Working Paper No. 8824. Available at SSRN: https://ssrn.com/abstract=3374631

Gabriel Lara Ibarra (Contact Author)

The World Bank - Poverty and Equity Global Practice ( email )

1818 H St NW
Washington, DC 20433
United States

Nistha Sinha

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

Rana Nayer Safwat Fayez

World Bank - Poverty and Equity Global Practice

1818 H Street, NW
Washington, DC 20433
United States

Jon Robbert Jellema

The Commitment to Equity Institute ( email )

6823 St Charles Ave
New Orleans, LA 70118
United States

HOME PAGE: http://www.commitmentoequity.org

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