Reduction of inequality is one of the core Sustainable Development Goals (SDGs). One of the targets of SDG 10 is for income growth of a country’s poorest 40% to be higher than the national average. Reaching this objective requires setting up economic policies on public expenditures and taxes that will benefit the poorest people. At the same time, mobilizing tax revenue can play a key role in financing the SDGs, but it is important to understand under what conditions this higher level of tax revenue collection is reconcilable with the goal of reducing inequalities.

This project is part of the first phase of the Research Facility on Inequalities, coordinated by AFD and funded by the European Commission's Directorate-General for International Partnerships over the 2017-2020 period. The first phase of the Facility has led to the conduct of 22 research projects and the publication of around 100 research papers and policy briefs.

This research project seeks to improve understanding of the relationship between income inequality and budget policies in developing countries. The study is divided into three parts:

•  Investigation into the redistributive impact of taxes, transfers, and public expenditure in three countries of West Africa (Côte d’Ivoire, Mali, and Senegal). The analysis will try to answer the following questions:
  • Who pays taxes, and who benefits from the transfers and public expenditures?

  • What is the overall impact of the tax and transfer systems on inequalities?

  • What tax instrument can mobilize revenues while reducing poverty and inequality?

• Study of the effect on inequalities from applying different types of taxes in the developing countries. Is the increase in tax revenues (measured by the ratio between revenue and GDP) linked to a reduction or an increase in inequalities? The relationship between the type of taxes levied and the change in inequalities within a country and between different countries will be studied in order to identify which taxes are progressive or regressive.
• Analysis of tax compliance behaviors in Africa, by identifying how the level of inequalities affects citizens’ attitude towards taxes.

This research project will use econometric quantitative studies based on household survey data and macro-economic data available on a large number of countries (Parts 2 and 3). Microsimulation tools will also be used (Part 1).

You may find the research papers and the policy briefs here :

Research papers:

• Fiscal consolidation and health inequality: Evidence from infant mortality in Sub-Saharan Africa
• Collect more, spend better? Assessing the incidence of fiscal systems and public spending in three francophone West African countries
• Inequality in the public good provision and attitude towards taxation: sub-national evidence from Africa

Policy briefs:

• Collect more, spend better? Enhancing fiscal redistribution in West Africa
• Fiscal consolidation in Sub-Saharan Africa: Unequal effects on children’s health
• Building fiscal capacity in Sub-Saharan Africa: The role of local inequality
• Measuring local inequality: Insights from data on night lights

Find also the presentation of the research paper "Inequality in the public good provision and attitude towards taxation: sub-national evidence from Africa" by Marin Ferry, Senior Lecturer at Gustave Eiffel University / Associate Researcher IRD-DIAL during the fourth webinar of the Research Facility on Inequalities:

Contact: Hélène Ehrhart, Economist, AFD

Economic, social, and regional inequalities represent a major concern in Tunisia and around the world—for both ethical and political reasons. Growing gaps in equality threaten stability and social peace. They also discourage private initiative, curb investment, and reduce productivity.

This project is part of the first phase of the Research Facility on Inequalities, coordinated by AFD and funded by the European Commission's Directorate-General for International Partnerships over the 2017-2020 period. The first phase of the Facility has led to the conduct of 22 research projects and the publication of around 100 research papers and policy briefs.

This research project has two components.

• The first consists of an in-depth review of the state of inequalities in Tunisia, including the geographical dimension. It should help take stock of the knowledge about this issue in Tunisia, by highlighting the territorial aspects of the various dimensions of inequalities.
• The second component involves analysis of the determinants of inequalities. In a context of territorial comparison, the analysis focuses on social characteristics, training, and evolution of social capital. It also takes into account the importance of heritage in skills and knowledge, i.e. the inherited human capital that supplements the human capital acquired through the formal education system.

The two components of this research program are complementary and must be carried out in a parallel fashion. The objective? To give a broader perspective of the geographical aspects that characterize inequalities in Tunisia.

Two articles, available in the "Results" section below, have been produced from the research:

• The first one that takes stock of the inequalities;
• The second one on their determinants and on the role of human and social capital in the emergence (or formation) of inequalities.

• A review of national and international literature will be conducted, especially on the conceptual and theoretical aspects. This will make it possible to fine-tune the analytical framework for measurement and analysis of inequalities and their determinants.
• A quantitative analysis on the state and evolution of inequalities will be carried out, based on available data.
• A survey will be carried out, with the main objective of gathering data on human capital and on social capital, through the diverse geographical areas of Tunisia where quite homogeneous communities are identified. This survey will make it possible to propose a measurement of human and social capital, which will be used to analyze the determinants of inequalities.

You may find the research papers and the policy brief below.

Research papers:

• Les inégalités en Tunisie (in French)
• Les inégalités en Tunisie : quels rôles pour le capital humain hérité et le capital social ? (in French)

Policy brief:

• Inequalities in Tunisia: what role for inherited human capital and social capital?

Contact:

• Cecilia Poggi, Research Officer, AFD