What Difference Does Government Make? Measuring Redistribution in a Comparative Perspective

Government policies in all countries affect the distribution of household income. In high-income countries, they do so through a range of programs but most directly through the cash transfers paid to households and the direct taxes and social security contributions collected from them. In addition, other social spending programs and other forms of taxes impact on households. Different welfare states may pursue a variety of social objectives, with the balance and priority given to each of them varying across both countries and between programs. A critical issue that all governments confront – particularly when considering policy reforms – is whether the redistributive and other policy objectives of society could be more effectively or efficiently achieved through a different mix or design of policies.