Research background: Income inequality has risen sharply since the 1990s, despite the increase in the average size of redistribution in countries representing different welfare state models. The problem of increasing income inequality is currently a challenge for the EU economies, not only with well-established liberal traditions, but also with conservative and social-democratic ones. Therefore, it is worth conducting research on the redistributive effects of fiscal policy. Purpose of the article: The article aims to show the redistributive effects of fiscal policy, paying particular attention to the most characteristic trends in redistribution, which are responsible for the growing income inequality. An overview of the fiscal instruments ? mainly personal income tax and benefit systems ? along with an empirical research on their potential impact on income inequality, allows for conclusions to be drawn about the effectiveness of redistributive policy in the EU countries. Methods: Both descriptive analysis and panel data analysis is implemented to examine the effectiveness of redistributive policy in tackling income inequality in the EU?28 countries in years 2005?2017. Findings & value added: Based on the panel analysis, it has been found that social transfers were much more effective than direct taxes in combating income inequality. In addition, the largest increase in income inequality ? as previously assumed ? was observed in the liberal welfare states, while the smallest in the social democratic welfare states. The empirical analysis extends the existing knowledge on main weaknesses of fiscal welfare state, indicating the required changes that may improve both its equity and efficiency.

This article traces the development of the concept of homo oeconomicus, a fundamental principle of mainstream economics. The concept is compared against alternative approaches proposed by representatives of other schools of thought such as heterodox economics, behavioural economics and...

Purpose: The aim of the research is to build an index of fiscal illusion to assess the size of the problem in regards to the euro area countries in the period 2004-2016. Design/Methodology/Approach: The analysis of fiscal illusion phenomenon is based on critical analysis of public finance literature which helped in indicating the main sources of fiscal illusion and capturing its different dimensions. In addition, literature analysis enabled the selection of the most appropriate measures related to various aspects of illusion. Initially, the principal component analysis (PCA) was conducted to identify main factors which should be included in the formula of index. The selected factors were built on the basis of different measures and indicators that can be assigned to the selected dimensions of fiscal illusion. This allowed to construct the index of fiscal illusion. Findings: The authors noticed that economies characterized by a relatively high fiscal illusion and low quality of public finance may find it difficult to achieve fiscal sustainability in the long-term. In the analyzed period, the highest average value of the fiscal illusion index was recorded in Italy (the average FII 0,935), while the lowest in Estonia (the average FII 0,07). The results of the study revealed the significance of institutional determinants, which both influence the quality of public finance and the size of fiscal illusion. Practical Implications: The results are important not only for policymakers to understand the consequences of their decisions for public finance sustainability, but also for society, increasing its awareness of current tax burdens paid and benefits received. Originality/Value: The paper discusses the most important issues regarding fiscal illusion which seems to be obstacle in achieving public finance sustainability. The results of the research certainly enriched the existing knowledge on the phenomenon of fiscal illusion, its causes and ways of measurement.

Research background: Independent fiscal councils are an example of new fiscal institutions, the number of which has rapidly increased around the world, including the EU countries since the global financial crisis of 2008?09. A further deterioration of public finance has provoked many economists to intensify disputes regarding the optimal shape, functions and effectiveness of fiscal councils responsible for promoting sound fiscal policy. Given this, a research focus on independent fiscal councils, active in the public debate in Europe, seems intellectually attractive. Purpose of the article: This article aims to explore the impact of Independent Fiscal Councils on fiscal performance, paying particular attention to their mandate, tasks and institutional models which can strengthen the achievement of fiscal discipline in the EU countries. In connection with this, the question arises about the effectiveness of fiscal councils, especially in the case of institutions that were compulsorily created under the external pressure (at the European level) and found no strong political support in national parliaments. Methods: Descriptive analysis along with panel data analysis were implemented to show the role of fiscal councils in enhancing fiscal discipline in the EU countries in years 2006?17 on the basis of data collected by the European Commission. Findings & Value added: The improvement in fiscal performance and better macroeconomic and budgetary forecasts can be achieved thanks to well-designed fiscal councils supported by appropriate fiscal rules. The conducted analysis confirms that independent fiscal councils are the useful mechanism introducing indirect social control over government revenues and expenditures. This means greater fiscal transparency and lower fiscal illusion between the government and the electorate. Due to the increase in the transparency of public finance, it is possible to reduce the ?partisan? deficit bias that contributes to public debt growth. The empirical research extends the existing knowledge on the role of fiscal councils and their impact on fiscal performance.

The article aims to provide evidence of the link between income inequality and climate change in both developed and low-income economies. This study uses a descriptive analysis method along with panel data analysis to assess the impact of climate changes on income inequality in 42 advanced economies and 68 developing countries between 1995 and 2020. The results of empirical research confirm that climate change is an important factor responsible for growing income inequality. The impact of a country’s vulnerability is positively associated with increasing income inequality in low-income economies. In turn, climate resilience has a statistically significant effect on income distribution in both groups, although the ability to mitigate climate change and adapt is considerably weaker in developing countries. This research raises our awareness of the links between the economy and climate change, including their implications for income inequality, and signals possible changes in the redistributive system to mitigate climate change and combat income inequality. The added value of this article is the results of research on the negative consequences of climate change on income inequality in over 100 countries. Particular attention was paid to the ethical issue of unequal responsibility for causing climate change between rich and poor countries.