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Oil and Income Distribution in Venezuela 1968–76

  • François Bourguignon

Abstract

The various increases in oil prices which have taken place since 1973 have raised Venezuela’s national income by more than 30 per cent. A fundamental question arises in view of such dramatic gain; have all sectors of the population shared equally in this oil ‘bonus’ or has it benefited only specific groups?

Keywords

Income Distribution Public Expenditure Gini Coefficient Import Price Redistributive Effect 
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Notes

  1. 5.
    Most of the simplifying assumptions we will make are more or less standard in the redistribution literature. See, for instance, M. Reynolds and F. Smolensky, Public Expenditures, Taxes and the Distribution of Income; The United States, 1950, 1961, 1970, (New York: Academic Press, 1977)Google Scholar
  2. W. Gillespie, The Redistribution of Income in Canada: 1969’ (Ottawa: Carlton University, 1975)Google Scholar
  3. P. Cazenave and C. Morrisson, Justice et Redistribution (Paris: Economica, 1978).Google Scholar
  4. 9.
    It has been shown by N. Kakwani, ‘Measurement of Tax Progressivity’, Economic Journal, 87 (1976) pp. 71–85, that the change ΔG in the Gini coefficient of an income distribution resulting from various transfers i with weight ti in the total primary income of the population was given by: where ci is the concentration coefficient of transfer i in the population when individuals are ranked by increasing primary incomes. Thus (ci — G) measures the ‘progressivity’ of the transfer —i.e. the distribution of one monetary unit of that transfer among all individuals ‘whereas the terms in t. correspond to the size of the transfers. The product of both terms gives the ‘incidence’ of the transfer upon total inequality. The ‘progressivity’ indexes in Table 18.5 are the (c. — G) multiplied by 0.1 (The index = about 10). This methodology has been generalised to other inequality measures in F. Bourguignon, ‘Mesures alternatives de la progressivité d’un système redistributif’ mimeo (Paris: Ecole Normale Supérieure, 1978).CrossRefGoogle Scholar
  5. 10.
    The Gini coefficient of primary distribution in Venezuela is probably somewhat above 0.500. This total redistributive effect represents then a two per cent change in the Gini coefficient. C. Morrisson, ‘Les conséquences sur la redistribution des choix publics selon de développement’, mimeo (Meeting of the International Institute of Public Finances, Hamburg, September 1978).Google Scholar
  6. 12.
    A review of Venezuelan income distribution data is made by L. Urdaneta, Distribucion del Ingreso: Analisis del Caso Venezulano (Caracas: Banco Central de Venezuela, 1977).Google Scholar
  7. 13.
    E. Thorbecke and A. Dasgupta, ‘A Consistency Check of Employment and Income Distribution Objectives in Colombia’, mimeo (Washington: IBRD, 1973).Google Scholar

Copyright information

© Jacques De Bandt, Péter Mándi and Dudley Seers 1980

Authors and Affiliations

  • François Bourguignon

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