Contextual use proves transfers alone qualify as ‘FR.’
Edwin Goñi 11, Lead Economist at the Inter-American Development Bank, et al., 2011, “Fiscal Redistribution and Income Inequality in Latin America,” World Development, Vol. 39, Issue 9, pp. 1558-1569, https://doi.org/10.1016/j.worlddev.2011.04.025
Second, wherever there is significant fiscal redistribution, it is achieved through transfers—especially in-kind transfers—rather than taxes. This result is consistent with the conclusions of Harberger (2003) and, more recently, OECD (2008), and extends to other Latin American countries the earlier findings of Engel, Galetovic, and Raddatz (1999) for Chile. In addition, however, the paper’s quantitative results show that the redistributive impact of transfers can be quite considerable, in contrast with Harberger’s conclusion that they were at best moderately more potent than taxes in this regard. In effect, we find that transfers largely responsible for the wide disparity in income inequality between the European and Latin American countries were examined.