Distributional Impact of Fiscal Policies: A Survey of Methodological Approaches

This research paper is meant to be a guide for analysts and policymakers on available tools for assessing the distributional impact of existing fiscal systems as well as policy reforms. In particular, we present detailed overviews of fiscal incidence analysis (FIA) and tax-benefit microsimulation models (MSM). The paper also briefly reviews alternative approaches to value benefits from education, health, and infrastructure, as well as different methods to analyze the distributional impact of fiscal policy by gender. The paper includes examples of using FIA and MSM for policy analysis.