Book Chapter
Income Distribution and Tax and Government Social Spending Policies in Developing Countries

Provides an overview of the changes in income distribution in developing and transition countries in recent decades, and assesses the incidence of taxes and government expenditure in these countries. For the overview of income distribution, the chapter relies largely on a set of newly available ‘high‐quality’ income‐distribution data. For the assessment of tax and government expenditure incidence, it relies on existing incidence studies on individual countries. The chapter has five sections: Introduction; The Role of Taxes and Social Spending; Selective Literature Survey—a survey of the studies on the incidence of taxes and expenditure, paying particular attention to the incidence of government spending on education and health, and reviewing the available evidence for a large number of developing countries; Role of Taxes and Government Social Spending Policy—this section offers an overview of the changes in income distribution in developing countries from the 1970s to the 1990s, with separate discussion of the nature of tax reforms and social expenditure policy and their distributional implications in selected countries (Hungary, Indonesia, and Thailand); and Summary and Conclusions.