Income Distribution Determinants and Public Spending Efficiency

• Author(s): Afonso, António ; Schknecht, Ludger ; Tanzi, Vito
• Date: 2008
• Persistent ID: http://hdl.handle.net/10400.5/2330
• Origin: Repositório da UTL
• Subject(s): income redistribution; public spending; efficiency; DEA
• Document Type: Other
• Language: English

Description

In this paper we examine the impact of public spending, education, and institutions on income distribution in advanced economies. We also assess the efficiency of public spending in redistributing income by using a DEA (Data Envelopment Analysis) non-parametric approach. We find that public policies significantly affect income distribution, notably via social spending, and indirectly via high quality education/human capital and via sound economic institutions. Moreover, for our set of OECD countries, and within a two-step approach, several so-called non-discretionary factors help explaining public social spending inefficiencies.