Assessing the “Pro-Poorness” of Government Fiscal Policy in Thailand

Abstract

This article proposes a methodology to assess the “pro-poorness” of government fiscal policies in view of bringing marginal reforms. A government policy is said to be “pro-poor” if it benefits the poor proportionally more 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 pro-poor index that can be used to assess government expenditure and tax policies. This index may be useful in making government fiscal system more beneficial toward the poor through marginal reforms. The proposed methodology is applied to Thailand, using the 1998 Socio-Economic Survey.