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Citation Information

Type Journal Article
Title Optimal fiscal policy according to equality of opportunity. A case study applied to Ivory Coast
Publication (Day/Month/Year) 2008
URL http://mail.dial.prd.fr/dial_pagesperso/dial_mesple/worksinprogress/fiscalpoliciandeopiniciv_sep08_A​FSE.pdf
To what extent the political crisis of Ivory Coast that has lead to the partition of the country since 2002 is correlated to inequality of opportunity? Can direct tax regime bemodified to reduce inequality of opportunity for income? The aim of the paper is to analyze inequality of opportunity for income in Ivory Coast from 1985-88 to 1998, and direct tax regime incidence on inequality of opportunity. The paper is in keeping with the theory of equality of opportunity of Roemer, and addresses, for the first time, the feasibility of directfiscal reforms according to equality of opportunity principle in less developed country like Ivory Coast. First, we show that, from 1985-88 to 1998, individuals born in the North of the country and in rural areas are the most disadvantaged category of the population, their expected income conditional to their origins being the lowest. This fact could explain partly the Ivorian political crisis. Second, we confirm that inequality of opportunity for incomeseems to correlate with overall income inequality more than with mean average income.Third, it is shown that direct tax-regime has no incidence on inequality of opportunity. Fourth, implementing tax-and-transfer reform to reduce inequality of opportunity for income requires granting the most disadvantage type of the population and, at least, double the mean tax rate of the advantage type of the population. But, this reform does not generate systematically an efficiency cost

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