2017年-IMF国际货币组织全球_Lessons_from_the_Old_Masters_on_Assessing_Equity_and_Efficiency_A_Primer_for_Fiscal_Policymakers_34页_1mb

Summary of IMF Working Paper: Lessons from the Old Masters on Assessing Equity and Efficiency

Core Content

This IMF Working Paper explores how to assess both equity and efficiency in fiscal policy through the lens of two seminal contributions from classical economists: Arthur Okun's "leaky bucket" exercise and Anthony Atkinson's equally-distributed-equivalent income (EDEI). The paper aims to provide a practical guide for fiscal policymakers to evaluate the trade-offs between income redistribution and economic efficiency using these tools.

Main Points

• Economic welfare depends on both the size and distribution of national income.
• The "leaky bucket" exercise by Okun is a thought experiment that helps elicit people's preferences regarding the trade-off between equality and efficiency. It asks individuals to consider whether they would accept a tax-and-transfer scheme, taking into account the leakage (i.e., the proportion of the transfer that does not reach the poor).
• Okun's own leakage threshold is estimated to be 60%, implying that he would accept a transfer that results in only 40% of the tax collected reaching the poor.
• Atkinson's EDEI is a monetary measure that summarizes societal well-being by equating the well-being of an unequal income distribution with that of a perfectly equal one. It allows for the comparison of different income distributions in terms of monetary units.
• The EDEI is calculated using a functional form that reflects inequality aversion, typically represented by a parameter ε.
• A higher ε indicates a stronger aversion to inequality, which in turn leads to a lower EDEI (i.e., society is willing to accept a smaller total income for equal distribution).
• The relationship between Okun's leaky bucket and Atkinson's EDEI is explored, showing that the leakage coefficient and inequality aversion are interdependent. A higher leakage implies a lower inequality aversion, and vice versa.
• The paper applies these concepts to real-world data, analyzing how different countries fare in terms of income distribution and societal well-being.
• It also discusses empirical applications, including how a hypothetical tax-and-transfer scheme might affect social welfare, and how leakage impacts the acceptability of such schemes.
• The conclusion emphasizes the importance of systematically analyzing both equity and efficiency in fiscal policy to improve the design and evaluation of redistribution mechanisms.

Key Information

Okun's Leaky Bucket Exercise

• Purpose: Elicit people's preferences on redistribution by considering the leakage in tax-and-transfer schemes.
• Example: A tax of $4,000 on a rich family (earning $45,000) and a transfer of $1,000 to each of four poor families (earning $5,000).
• Leakage refers to the losses due to administrative costs, corruption, or reduced economic incentives.
• Formula for a tax-and-transfer scheme with small transfers:
  $$
  (1 - b) w'(I_P) \geq w'(I_R)
  $$
  where $b$ is the leakage rate and $w'(I)$ is the marginal utility of income.

Atkinson's Equally-Distributed-Equivalent Income (EDEI)

• Definition: The income level that would yield the same social welfare as an unequal distribution.
• Formula:
  $$
  2 * w(\bar{I}) = w(I_P) + w(I_R)
  $$
  where $w(I)$ is a utility function and $\bar{I}$ is the equally-distributed-equivalent income.
• Inequality aversion coefficient (ε) determines the shape of the utility function.
• Example: For $I_R = 45,000$ and $I_P = 5,000$, the EDEI is $20,000 when ε = 0.5.
• Atkinson's inequality index:
  $$
  A = \frac{\mu - \bar{I}}{\mu} = 1 - \frac{\bar{I}}{\mu}
  $$
  where μ is the mean income.

Empirical Applications

• The paper analyzes income distribution across a large panel of countries.
• It also explores hypothetical tax-and-transfer schemes using a general equilibrium model.
• The median inequality aversion across different studies is found to be below 0.5, suggesting that people are not highly averse to inequality.
• Leakage significantly affects the acceptability of redistribution schemes. A higher leakage reduces the willingness to redistribute.
• The UBI (Universal Basic Income) is analyzed in terms of gains in EDEI depending on the financing source.

Key Tables and Figures

• Table 1 shows the maximum acceptable leakage and inequality aversion for different income ratios.
• Table 2 provides EDEI values for various ε coefficients, illustrating the trade-off between inequality aversion and income levels.
• Figure 1 and Figure 2 visually represent the relationship between income inequality and social welfare.
• Figure 3 shows the inverse relationship between transfer size and inequality aversion.

Related Studies

• The paper links the concepts to public finance, income distribution, and economic growth.
• It discusses the trade-off between efficiency and redistribution, suggesting that while some inequality is beneficial, excessive inequality can hinder growth.
• It also references Sen's social welfare function, which combines mean income and the Gini coefficient.

Conclusion

The paper concludes that the tools developed by Okun and Atkinson offer a practical and intuitive way to assess equity and efficiency in fiscal policy. These tools can be used to evaluate redistribution schemes and rank policies based on their impact on social welfare. The empirical application of these methods to real-world data highlights the importance of inequality aversion and leakage in shaping public preferences and policy outcomes.