The Income Lever and the Allocation of Aid

The paper develops a concept and a measure of the monetary capacity of a country to reduce its own poverty and shows how these tools can be used to guide budget allocations or the allocation of aid. The authors call this concept the income lever. Making use of tax and distributive theory, the paper...

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Main Authors:	Ceriani, Lidia, Verme, Paolo
Format:	Policy Research Working Paper
Language:	en_US
Published:	World Bank, Washington, D.C. 2013
Subjects:	absolute poverty absolute poverty line absolute terms affluence agricultural development aid effectiveness American Economic Review consumer price developing countries Development Economics Development Goals development indicators development policy Development Report economic development economic growth Economic Management Economics empirical application empirical evidence empirical literature equal countries exchange rate Extreme Poverty Financial Flows fiscal stability global level global poverty growth effect household consumption household size household surveys human rights Income income data income distribution income distributions income levels individual countries inequality Living Conditions low income low income countries low-income countries marginal tax marginal tax rate measurement of poverty micro data middle income middle income countries National Income Policy Research Political Economy political instability poor poor areas poor countries poor individuals poor policies population share poverty eradication poverty gap poverty gap index poverty incidence poverty level poverty line Poverty measurement poverty measures poverty rate poverty rates Poverty Reduction poverty target Public Policy Purchasing Power Purchasing Power Parity Redistribution Policies redistributive policies reducing poverty Regional Competitiveness Regional Development Regional Development Fund regional policies Regional Policy rich countries social funds structural vulnerability targeting taxation Volatility wealth welfare variable World Economy
Online Access:	http://hdl.handle.net/10986/16327

id	okr-10986-16327
recordtype	oai_dc
spelling	okr-10986-163272021-04-23T14:03:28Z The Income Lever and the Allocation of Aid Ceriani, Lidia Verme, Paolo absolute poverty absolute poverty line absolute terms affluence agricultural development aid effectiveness American Economic Review consumer price developing countries Development Economics Development Goals development indicators development policy Development Report economic development economic growth Economic Management Economics empirical application empirical evidence empirical literature equal countries exchange rate Extreme Poverty Financial Flows fiscal stability global level global poverty growth effect household consumption household size household surveys human rights Income income data income distribution income distributions income levels individual countries inequality Living Conditions low income low income countries low-income countries marginal tax marginal tax rate measurement of poverty micro data middle income middle income countries National Income Policy Research Political Economy political instability poor poor areas poor countries poor individuals poor policies population share poverty eradication poverty gap poverty gap index poverty incidence poverty level poverty line Poverty measurement poverty measures poverty rate poverty rates Poverty Reduction poverty target Public Policy Purchasing Power Purchasing Power Parity Redistribution Policies redistributive policies reducing poverty Regional Competitiveness Regional Development Regional Development Fund regional policies Regional Policy rich countries social funds structural vulnerability targeting taxation Volatility wealth welfare variable World Economy The paper develops a concept and a measure of the monetary capacity of a country to reduce its own poverty and shows how these tools can be used to guide budget allocations or the allocation of aid. The authors call this concept the income lever. Making use of tax and distributive theory, the paper shows how different redistributive criteria correspond to the different normative criteria of the income lever. It then constructs various income lever indexes based on these criteria and uses such indexes to rank countries according to their own capacity to reduce poverty. As shown in the empirical application, this methodology can provide an equitable tool to rank countries or regions when it comes to budget or aid allocations, whether it is the allocation of social funds within the European Union (North-North transfers) or the allocation of aid from rich to poor countries (North-South transfers). The findings indicate that the allocation of social funds in the European Union follows closely the rank that results from the income lever indexes proposed while the allocation of aid to Sub-Saharan African countries does not. 2013-12-02T17:18:36Z 2013-12-02T17:18:36Z 2013-02 http://hdl.handle.net/10986/16327 en_US Policy Research Working Paper;No.6367 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, D.C. Publications & Research :: Policy Research Working Paper Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	en_US
topic	absolute poverty absolute poverty line absolute terms affluence agricultural development aid effectiveness American Economic Review consumer price developing countries Development Economics Development Goals development indicators development policy Development Report economic development economic growth Economic Management Economics empirical application empirical evidence empirical literature equal countries exchange rate Extreme Poverty Financial Flows fiscal stability global level global poverty growth effect household consumption household size household surveys human rights Income income data income distribution income distributions income levels individual countries inequality Living Conditions low income low income countries low-income countries marginal tax marginal tax rate measurement of poverty micro data middle income middle income countries National Income Policy Research Political Economy political instability poor poor areas poor countries poor individuals poor policies population share poverty eradication poverty gap poverty gap index poverty incidence poverty level poverty line Poverty measurement poverty measures poverty rate poverty rates Poverty Reduction poverty target Public Policy Purchasing Power Purchasing Power Parity Redistribution Policies redistributive policies reducing poverty Regional Competitiveness Regional Development Regional Development Fund regional policies Regional Policy rich countries social funds structural vulnerability targeting taxation Volatility wealth welfare variable World Economy
spellingShingle	absolute poverty absolute poverty line absolute terms affluence agricultural development aid effectiveness American Economic Review consumer price developing countries Development Economics Development Goals development indicators development policy Development Report economic development economic growth Economic Management Economics empirical application empirical evidence empirical literature equal countries exchange rate Extreme Poverty Financial Flows fiscal stability global level global poverty growth effect household consumption household size household surveys human rights Income income data income distribution income distributions income levels individual countries inequality Living Conditions low income low income countries low-income countries marginal tax marginal tax rate measurement of poverty micro data middle income middle income countries National Income Policy Research Political Economy political instability poor poor areas poor countries poor individuals poor policies population share poverty eradication poverty gap poverty gap index poverty incidence poverty level poverty line Poverty measurement poverty measures poverty rate poverty rates Poverty Reduction poverty target Public Policy Purchasing Power Purchasing Power Parity Redistribution Policies redistributive policies reducing poverty Regional Competitiveness Regional Development Regional Development Fund regional policies Regional Policy rich countries social funds structural vulnerability targeting taxation Volatility wealth welfare variable World Economy Ceriani, Lidia Verme, Paolo The Income Lever and the Allocation of Aid
relation	Policy Research Working Paper;No.6367
description	The paper develops a concept and a measure of the monetary capacity of a country to reduce its own poverty and shows how these tools can be used to guide budget allocations or the allocation of aid. The authors call this concept the income lever. Making use of tax and distributive theory, the paper shows how different redistributive criteria correspond to the different normative criteria of the income lever. It then constructs various income lever indexes based on these criteria and uses such indexes to rank countries according to their own capacity to reduce poverty. As shown in the empirical application, this methodology can provide an equitable tool to rank countries or regions when it comes to budget or aid allocations, whether it is the allocation of social funds within the European Union (North-North transfers) or the allocation of aid from rich to poor countries (North-South transfers). The findings indicate that the allocation of social funds in the European Union follows closely the rank that results from the income lever indexes proposed while the allocation of aid to Sub-Saharan African countries does not.
format	Publications & Research :: Policy Research Working Paper
author	Ceriani, Lidia Verme, Paolo
author_facet	Ceriani, Lidia Verme, Paolo
author_sort	Ceriani, Lidia
title	The Income Lever and the Allocation of Aid
title_short	The Income Lever and the Allocation of Aid
title_full	The Income Lever and the Allocation of Aid
title_fullStr	The Income Lever and the Allocation of Aid
title_full_unstemmed	The Income Lever and the Allocation of Aid
title_sort	income lever and the allocation of aid
publisher	World Bank, Washington, D.C.
publishDate	2013
url	http://hdl.handle.net/10986/16327
_version_	1764432889973309440

The Income Lever and the Allocation of Aid

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