Assessing the Pro-poorness of Government Fiscal Policy in Thailand

This paper proposes a m ethodology to assess the pro-poorness of governm ent fiscal policies in view of bringing m arginal reform s. A governm ent policy is said to be pro-poor if it benefits the poor proportionally m ore than the non-poor. The author first derives the poverty elasticity for the general class of poverty. Then, using the idea of poverty elasticity, she proposes a propoor index that can be utilized to assess governm ent expenditure and tax policies. This index m ay be useful in m aking the governm ent fiscal system m ore beneficial tow ards the poor through m arginal reform s. The proposed m ethodology is applied to Thailand, utilizing the 1998 Socio-Econom ic Survey. Keyw ords: Poverty, Incom e distribution, Pro-Poor, Tax policy, Public spending. JEL Classification: I3, D 31, H2, H3 * I am grateful to Professor Nanak Kakw ani for his valuable com m ents and suggestions. E-m ail address for correspondence: hyun.son@ undp-povertycentre.org; Tel: 55-61-2105 5025; Fax: 55-61-2105 5000/5001. 2 International Poverty Centre W orking Paper no 15