Does Fiscal Policy Benefit the Poor and Reduce Inequality in Namibia?
Reducing poverty and inequality continues to be an important national priority in Namibia. Vision 2030 – the country’s guiding development strategy – has a subordinate vision that points to several goals: “Poverty is reduced to the minimum, the exi...
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| Format: | Report |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2017
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/991551497258273367/Does-fiscal-policy-benefit-the-poor-and-reduce-inequality-in-Namibia http://hdl.handle.net/10986/27538 |
| Summary: | Reducing poverty and inequality
continues to be an important national priority in Namibia.
Vision 2030 – the country’s guiding development strategy –
has a subordinate vision that points to several goals:
“Poverty is reduced to the minimum, the existing pattern of
income-distribution is equitable and disparity is at the
minimum.” Vision 2030 is being implemented via a series of
five-year National Development Plans, with the current
National Development Plan IV (NDP4) covering 2012 through to
2017. NDP4 sets specific numerical targets. One is reducing
the incidence of extreme poverty to less than 10 percent of
individuals by the end of FY2016/17, measured at the
national lower bound poverty line of N$277.54 in 2009/10.
This report demonstrates that Namibia’s progressive income
tax and generous social spending programs substantially
reduce poverty and inequality, but the analysis also
underscores the limits of what redistributive fiscal
measures alone can accomplish. The economy must ultimately
create more jobs for the poorest members of society to
change the underlying distribution of what might be called
“pre-fiscal” income; i.e., the income before households pay
taxes and receive benefits from social programs. This will
require structural transformation through greater investment
in activities that create employment for unskilled workers
and offer the potential for continuous productivity
increases. This report aims to measure the effectiveness of
these efforts and draws comparisons to the experiences of
other countries. It estimates how major taxes and social
spending programs affect individual incomes. It then
assesses who benefits from or bears the burden of each
instrument and by how much. This way, the analysis estimates
the contribution of each instrument to reducing the poverty
headcount and the Gini coefficient, a standard measure of
inequality. The analysis provides evidence that can shape
public debates over government spending and the design of
social programs. |
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