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The article 'Fiscal Policy, Multidimensional Poverty, and Equity in Uganda: A Child-Lens Analysis', written by Jose Cuesta, Jon Jellema and Lucia Ferrone was originally published electronically on the publisher's internet portal on 18 of May 2021 without open access. With the author(s)' decision to opt for Open Choice the copyright of the article changed on 14 of September 2021 to © The Author(s), 2021 and the article is forthwith distributed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article's Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article's Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0.

AbstractFiscal incidence analysis is the most widely used methodology to assess the distributional effects of fiscal policies. However, despite 40 years of use and refinement, it still lacks. A focus on the redistributive capacity of fiscal policy among children is increasingly important as policymakers pay growing attention to the disproportionate incidence of poverty among children globally. This paper brings a child-dedicated focus to fiscal incidence analysis by tracking child-relevant benefits, making child wellbeing the unit of analysis, and using multidimensional child poverty metrics. The analysis—Commitment to Equity for Children, or CEQ4C—integrates three analytical frameworks: public finance, fiscal incidence, and multidimensional child poverty. The paper develops a proof of concept for Uganda that includes measurement, diagnostics, and a policy simulation package replicable across diverse contexts. The proof of concept confirms that CEQ4C provides a higher-resolution fiscal incidence analysis for children than the traditional fiscal incidence analysis.

As the Arab Spring unfolded and political unrest spread across the Arab world, Jordan faced an adverse economy as well. Fundamental to the economic challenge was high and rising energy prices, already heavily subsidized for consumers. With the government intent on staving off emerging political unrest through a series of measures, buffering consumers from increased energy prices being a key action, fiscal costs mounted. By 2012, subsidies on petroleum products alone were about 2.8 percent of GDP and 8.8 percent of government expenditures. At the same time, political unrest disrupted the supply of natural gas from Egypt and Jordan abruptly had to switch to using imported oil products (heavy fuel oil and diesel) to produce electricity. Consequently, the cost of producing electricity increased several folds. As the increased cost was not passed on to the consumers, National Electric Power company (NEPCO), bore all the increases in fuel prices and accumulate debt as a result. At approximately 17 percent of government expenditures and 5.5 percent of GDP in 2011, this was twice the amount of the petroleum subsidies. The chapter is organized as follows. Section two traces the evolution of subsidies in Jordan in recent times. The distributional impacts of reform would depend on how important the subsidized items are to consumers in terms of their expenditures on those items. Section three discusses this question from the perspective of richer and poorer households. The distributional impacts of reform would of course not only depend on how much consumers spend on the subsidized items but also on the extent of price changes. Sections four and five simulate direct and indirect impacts of potential reform scenarios across the income distribution. From this discussion, in section six the chapter moves onto considering how reforms are weighed down by vexing political economy constraints. In MENA countries, universal subsidies have been in place as part of the government's role in ensuring stability in the lives of the people and doing away with them is not straightforward.

Facing a fiscal crisis, Jordan initiated substantial petroleum subsidy reforms in 2012. The government has also long contemplated how to cut electricity subsidies, which surpass the fiscal burdens imposed by the petroleum subsidies. This paper estimates the impacts of the 2012 petroleum subsidies reform on household welfare and government revenues. It also simulates the distributional and fiscal impacts from ending subsidies in the electricity sector, where the pricing structure is more complex than petroleum prices. The paper looks at the direct and indirect impacts of reform. Moreover, the paper discusses the political economy considerations of reform. While the full removal of petroleum subsidies would have increased poverty, the compensatory cash transfer program the government instituted is estimated to have fully offset the negative impact for the poorer population. The impact of reforms in the electricity sector will depend significantly on the implementation method chosen. A flat increase of tariffs toward cost recovery will put a huge burden on the poorest households. However, a progressive increase in tariffs will generate substantial savings for the government, even with compensatory mechanisms to mitigate the strong negative impact on the vulnerable population. The immediate compensation of the losers from reform appears to be a crucial factor in the successful implementation of reforms in Jordan.

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.

As in high-income countries, reduced rates of VAT and VAT exemptions ("preferential VAT rates") are a common feature of indirect tax systems in LMICs. Many of the goods and services that are granted preferential rates - such as foodstuffs and kerosene - seem likely to receive such treatment on the grounds that they provide a means for the government to indirectly target poorer households, for whom such expenditures may take up a large proportion of their total budget. We use microsimulation methods to estimate the impact of preferential VAT rates in four LMIC countries, considering their effect on revenues, poverty, inequality, and across the consumption distribution. We consider whether other policy tools might be better suited for the pursuit of distributional objectives by estimating the impact of existing cash transfer schemes and a hypothetical scenario where the revenue raised from broadening the VAT base is used to fund a Universal Basic Income (UBI) in each country. We find that although preferential VAT rates reduce poverty, they are not well targeted towards poor households overall. Existing cash transfer schemes are better targeted but would not provide a suitable means of compensation for a broader VAT base given issues related to coverage and targeting mechanisms. Despite being completely untargeted, a UBI funded by the revenue gains from a broader VAT base would create large net gains for poor households and reduce inequality and most measures of extreme poverty in each of the countries studied - even if only 75% of the additional VAT revenue was disbursed as UBI payments. This is the first draft of a paper examining the distributional impacts of VAT exemptions and reduced rates and direct cash (and near-cash) transfer schemes in a series of low and middle income (LMIC) countries. All results presented are preliminary; it is being shared in order to elicit comments and provide early sight of findings we consider robust.