Assessing the Growth and Redistributive Impacts of Fiscal Policy Toward an Inclusive ASEAN, 2000-2020

Abstract

The goal of attaining a people-centered and people-oriented community is a key priority for ASEAN. The association characterized this community as a caring and sharing society that pursues growth in a vertical and horizontal manner–one which not only strives for increased national income but also alleviates socio-economic problems faced by many ASEAN peoples today. As with any socio-economic intervention, the first step to reinforcing ASEAN’s capacity in attaining such a goal is understanding how its current strategies are faring. There should be data-backed benchmarks on which performance can be measured especially amid revenue-related concerns that ASEAN member countries face to date. Considering these fiscal-related issues and the ability of fiscal policy to achieve inclusive growth, the study developed econometric models to assess the impact of fiscal policy, specifically taxes and spending, on growth and income redistribution in selected ASEAN member countries. Consequently, given the seeming dearth of related literature on ASEAN, the study also provides insights into ASEAN's experience in the field of fiscal policy. Findings indicate that ASEAN is lagging in its goal of attaining a people-centered and people-oriented community in terms of the member states’ implementation of taxes and spending. Data suggests that ASEAN's progress is one-sided in support of economic growth and that ASEAN member countries have not been leveraging their fiscal policies in achieving inclusive growth.