Capacity building to measure the redistributive impact of fiscal policy

18 Oct 2023 | By Charmaine Smith
A photo of the workshop facilitators and participants

ACEIR researchers from the Institute of Statistical, Social and Economic Research at the University of Ghana and members from civil society organisation who participated in the workshop held by Oxfam in Ghana, July 2023.

18 Oct 2023 | By Charmaine Smith

One of the targets of Sustainable Development Goal 10 is that policies – especially fiscal and social protection policies – are adopted by governments to progressively achieve greater equality. But, data for measuring progress towards this target is sparse. 

When the Leveraging Fiscal Policy to Reduce Inequality Project was piloted, only one data point existed for Ghana for the SDG 10 indicator on the redistributive impact of fiscal policy. This analysis was done by the Commitment to Equity (CEQ) Institute in collaboration with the World Bank in 2015 based on a household survey in 2012. When Oxfam in Ghana learned that a second Ghana study using the CEQ methodology was underway at ACEIR’s node at the Institute of Statistical, Social and Economic Research (ISSER), University of Ghana, they initiated discussions with the ACEIR team to collaborate.

Studies using the CEQ methodology have been completed in a wide array of low- and middle-income countries in all regions of the world and have been shown to be excellent tools for policy engagement on poverty and inequality.

The Oxfam project aims to use the CEQ methodology to contribute data to the SDG 10 indicator that measures the redistributive impact of a country’s overall fiscal policy. This data is comparable across other countries and allows measuring the redistributive impact of individual fiscal policies on either taxation (e.g., by increasing value-added tax) or on fiscal spending (such as increasing state benefits for children). 

To address the dearth of current data for the SDG 10 indicator on the redistributive impact of fiscal policy, and to close the capacity gap in civil society’s use of the CEQ tool, Oxfam in Ghana organised a capacity building session for civil society organisations (CSOs) on the use of the CEQ methodology. The two-day training workshop took place in Ghana in July and was facilitated by three ACEIR researchers at ISSER: Prof. Robert D. Osei, Dr Richmond Atta-Ankomah, and Dr Kwadwo Danso-Mensah. 

In attendance were representatives from CSOs with an interest in fiscal policy and other areas of social protection in Ghana, as well as from academia.

The training on day one covered an introduction to the CEQ methodology and its rationale; and sessions and in-class group exercises on understanding poverty and inequality measures. 

On the second day, participants put their heads together for an in-class exercise after they were orientated on the use of tools for measuring the distributional consequences of taxes and expenditures. This was followed by a session on the operationalisation of the CEQ methodology – with examples from Ghana – and then the presentation of ACEIR’s Ghana CEQ study, discussions on the advocacy implications of the research results, and reflections on learnings from the workshop. 

Sustainable Development Goal 10: 
Reduce inequality within and among countries 

Target 10.4: 
Adopt fiscal and social policies that promote equality

Indicator 10.4.2: 
Redistributive impact of fiscal policy

Oxfam has observed that civil society advocacy on SDGs and fiscal justice hardly focuses on the redistributive impact of fiscal policy measures and public spending to reduce inequality. Hence it was important for the Leveraging Fiscal Policy to Reduce Inequality Project to equip CSOs and other participants with the needed skills to advocate for more responsive fiscal policies to fight inequality. 

This training to educate CSOs and other participants on the use of the CEQ methodology to measure inequality has enhanced the capacity of 17 participants to track and monitor the redistributive impact of government fiscal policies in reducing inequality. They included representatives from the Africa Centre for Energy Policy; Africa Education Watch; Ghana Integrity Initiative – a chapter of Transparency International; the Economic Governance Platform; Ghana Anti-Corruption Coalition, Media Foundation for West Africa; National Resource Governance Institute, Ghana; Send Ghana; Norsaac; Tax Justice Coalition Ghana; and UNICEF. 

Oxfam in Ghana, with funding from the GIZ, launched this pilot project on leveraging fiscal policy to reduce inequality in 2021. The long-term vision of this project is that governments in Ghana and Indonesia will routinely estimate the distributional impact of all major fiscal reforms (tax or spending) that are under consideration; and that this analysis will be published and debated in parliament, the media, and by civil society.