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Nora Lustig is Samuel Z. Stone Professor of Latin American Economics and Director of the Commitment to Equity Institute (CEQ) at Tulane University. Professor Lustig’s research focuses on economic development, poverty and inequality, and social policies in developing countries. She has published more than seventy articles and fifteen edited volumes and books. Her current research is centered on assessing the impact of taxation and social spending on inequality and poverty in low and middle income countries, and on the determinants of income distribution in Latin America. Prof. Lustig is a founding member and past president of the Latin American and Caribbean Economic Association (LACEA) and was a co-director of the World Bank’s World Development Report 2000/1, Attacking Poverty. She is the editor of the Journal of Economic Inequality Forum and a member of the Inter-American Dialogue, the Center of Global Development’s Advisory Board, ECINEQ’s Executive Council, PEP’s Board of Directors, and the World Economic Forum’s Economic Growth and Social Inclusion Stewardship Board. She is also a Nonresident Fellow at the Center for Global Development and the Inter-American Dialogue. Prof. Lustig has served on the Atkinson Commission on Poverty and on the Stiglitz et al. Commission on Measuring Economic Performance and Social Progress. She received her doctorate in Economics from the University of California, Berkeley.
Investing in Health for Economic Development: The Case of Mexico, in Advancing Development Core Themes in Global Economics, edited by George Mavrotas and Anthony Shorrocks (Palgrave Macmillan in association with the United Nations University-World Institute for Development Economics Research, 2007)
The Microeconomics of Income Distribution Dynamics, co-edited with Francois Bourguignon and Francisco Ferreira (World Bank, 2004)
“Do We Know How Much Poverty There Is?” Oxford Development Studies, 32(4), December 2004. (Coauthor)
“Rising Inequality in Mexico: Returns to Household Characteristics and Regional Effects,” Journal of Development Studies, 39(4), 112-33, April 2003. (Coauthor)
“Life is not Easy: Mexico’s Quest for Stability and Growth,” Journal of Economic Perspectives, 15(1), 85-106, Winter 2001.
Shielding the Poor: Social Protection in the Developing World, ed. (Brookings Institution, 2001)
“Crises and the Poor: Socially Responsible Macroeconomics,” Economía, The Journal of the Latin American and Caribbean Economic Association, 1(1), 1-45, Fall 2000.
Mexico: The Remaking of an Economy (Brookings Institution, 2nd ed 1998)
Labor Markets in Latin America: Combining Social Protection With Market Flexibility, co-edited with Sebastian Edwards (Brookings Institution, 1997)
Coming Together? Mexico-U.S. Relations, co-edited with Barry Bosworth and Susan Collins (Brookings Institution, 1997)
Coping with Austerity: Poverty and Inequality in Latin America (Brookings Institution, 1995)
The gap between the richest and poorest countries -- and people -- not only persists, it is getting larger. In developing countries in particular, inequality is frequently economically destructive, interacting with underdeveloped markets and ineffective government programs to slow growth – which in turn slows progress in reducing poverty.
This CGD conference will bring together technical experts and policymakers to consider the strengths and weaknesses of various approaches to measuring and understanding inequality—and the potential application of these measures in setting national and global policy targets, including within the United Nations post-2015 development goals. It is intended as a substantive, technical contribution to the ongoing debate about what measures of inequality are useful in what settings, and how to include these in national and international policy goals.
The event will include two panels: the first comprised of experts on measurement approaches and issues; and a second panel of individuals drawn from development institutions, governments, and civil society.
In this paper we identify a group of people in Latin America and other developing countries that are not poor but not middle class either. We define them as the vulnerable “strugglers”, people living in households with daily income per capita between $4 and $10 (at constant 2005 PPP dollar). They are well above the international poverty line, but still vulnerable to falling back into poverty and hence not part of the secure middle class. In a first step, we use long-term growth projections to show that in Latin America about 200 million people will likely be in the struggler group in 2030, accounting for about a third of the total population.
Latin America is known for high levels of inequality, which governments can lessen somewhat through smart policy. In this paper, Nora Lustig and others analyze how and whether taxes, subsidies, and social spending reduce inequality across countries in the region and identify which policies are most beneficial.
Latin America's emerging middle class, defined as those unlikely to fall back into poverty, has grown by 50% in recent years and now includes one of every three people on the continent, roughly equal to the number of people who remain poor. A new World Bank study finds many potential benefits from this surging middle class but cautions that these benefits can only be fully realized if countries can strike a new social contract that links middle class interests to the inclusion of those left behind. The event will include presentation of the report's key findings and a panel discussion with some of the leading experts on the region's middle classes.
Poverty and well-being are multidimensional. Nobody questions that deprivations and achievements go beyond income. There is, however, sharp disagreement on whether the various dimensions of poverty and well-being can be aggregated into a single, multidimensional index in a meaningful
way. Is aggregating dimensions of poverty and well-being useful? Is it sensible? Here CGD non-resident fellow Nora Lustig summarizes and contrasts three key papers that respond to these questions in strikingly different ways.
Whether the poor are helped or hurt by taxes and transfers is generally determined by comparing
income distributions before and after fiscal policy using stochastic dominance tests and measures
of progressivity and horizontal inequity. We formally show that these tools can fail to capture an
important aspect: that a substantial proportion of the poor are made poorer (or non-poor made
poor) by the tax and transfer system.
Many governments try to reduce poverty and inequality through a mixture of taxes, transfers, and public services. Individual policies, such as taxation or cash transfers, are frequently evaluated on how well they address these goals. But the overall impact of a country’s fiscal policy package on poverty and inequality has rarely been subject to systematic analysis—until now.
This paper provides a theoretical foundation for analyzing the redistributive effect of taxes and transfers for the case in which the ranking of individuals by pre-fiscal income remains unchanged. We show that in a world with more than a single fiscal instrument, the simple rule that progressive taxes or transfers are always equalizing not necessarily holds, and offer alternative rules that survive a theoretical scrutiny. In particular, we show that the sign of the marginal contribution unambiguously predicts whether a tax or a transfer is equalizing or not.
Inequality and inclusive growth were high on the agenda of the Annual Meetings of the International Monetary Fund and World Bank earlier this month. We are glad about that, but the under-reported story here is that this prominence marks a dramatic shift in the IMF over the last two decades in the IMF’s approach to the relevant challenges for the poorest countries, including on the issue of social safety nets and social expenditures.