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Income Distribution Determinants and Public Spending Efficiency

Author/s of this resource: 
António Afonso, Ludger Schuknecht and Vito Tanzi
Organisation: 
European Central Bank
Resource Date: 
January 2008

In this paper we examine the impact of public spending, education, and institutions on income distribution in advanced economies. We also assess the efficiency of public spending in redistributing income by using a DEA (Data Envelopment Analysis) nonparametric approach. We find that public policies significantly affect income distribution, notably via social spending, and indirectly via high quality education/human capital and via sound economic institutions.

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