Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/331388 
Year of Publication: 
2025
Series/Report no.: 
WIDER Working Paper No. 56/25
Version Description: 
Correction: An error in the ISBN displayed below was corrected on 19 September 2025.
Publisher: 
The United Nations University World Institute for Development Economics Research (UNU-WIDER), Helsinki
Abstract: 
Trade mis-invoicing represents a significant economic challenge in Ghana, with losses estimated at 3.03 per cent of gross domestic product in 2018. We examine the potential of a universal child benefit in Ghana through a counterfactual taxation of illicit financial flows. Using microsimulation, we model two budget-neutral designs: a flat per-child transfer and a quasi-universal schedule with higher amounts for larger households. Both options lower poverty and inequality, with stronger effects in rural areas and among larger households. The universal design yields slightly greater overall poverty reduction: the quasi-universal variant better protects large families. Although such revenues cover only a limited share of the poverty gap, redirecting them can expand social protection without raising distortionary taxes. The study links tax justice to social policy expansion and questions claims that universal benefits are unaffordable in low- and lowermiddle-income countries. The study assesses only first-round effects and does not address political feasibility.
Subjects: 
illicit financial flows
universal child benefit
microsimulation
poverty and inequality
JEL: 
D31
H55
I32
Persistent Identifier of the first edition: 
ISBN: 
978-92-9267-615-5
Document Type: 
Working Paper

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