Economy

The paper focuses on poverty and income inequality in low income countries with special focus on political economics of poverty and role of fiscal policies in coping those problems. The issue of poverty in low income countries and how different factors are fomenting the problems in those nations are explained. The paper links the relevancy of fiscal policies in combating poverty and income inequality presenting examples of different countries. At some point, the paper explains how multilateral organization assisted fiscal policies are hurting the poverty reduction programs in poor income countries. This paper argues that lower income countries need to focus on increasing tax base, increasing the coverage of formal market for increasing the collection of revenue. For improving the efficacy of government expenditure and to reduce the poverty, the paper suggests to focus on agriculture research and development in low income countries, majority of which are food insecure together with investment on rural electrification and education.