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SOUTHMOD – simulating tax and benefit policies for development

The International Inequalities Institute is the partner of SOUTHMOD, a major international research project financed by UNU-WIDER to develop and use tax-benefit microsimulation models for selected developing countries.

Many low- and middle-income countries are working towards building up their redistributive and social protection systems, particularly in view of the growing risk of future economic crises. In these countries, sustainable financing of public spending in social protection and redistribution would also require increasing fiscal capacity through direct and indirect taxation. Therefore, understanding how the design of the tax-benefit system affects household incomes is crucial to develop effective policies to protect the most vulnerable.

Research under the SOUTHMOD project aims to promote the use of microsimulation models to analyse the impact of different tax-benefit policy reforms on household incomes and government revenues in the Global South. The project represents a major international collaboration between LSE, UNU-WIDER, the Southern African Social Policy Research Insights (SASPRI), and researchers from the low- and middle-income countries for which the models have been built. The III will also play a major role building capacity in these countries to encourage the use of microsimulation models among academics and policy makers.