Targeted Transfers in Poor Countries : Revisiting the Tradeoffs and Policy Options

Two tradeoffs have been widely seen to severely constrain the scope for attacking poverty using redistributive transfers in poor countries: an equity-efficiency tradeoff and an insurance-efficiency tradeoff. The author provides a critical overview...

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Bibliographic Details
Main Author:	Ravallion, Martin
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2014
Subjects:	TARGETED ASSISTANCE TARGETED SUBSIDIES REDISTRIBUTION TRADEOFFS EQUITY OBJECTIVES RISK MANAGEMENT ADMINISTRATIVE COSTS ADVERSE EFFECTS ADVERSE IMPACT AGGREGATE GROWTH AGGREGATE OUTPUT ASSET DISTRIBUTION ASSET INEQUALITY ASYMMETRIC INFORMATION CASH TRANSFERS CHRONIC POVERTY CONSUMPTION GROWTH COUNTRY-SPECIFIC EFFECTS CREDIT MARKET CREDIT MARKET FAILURE DATA SET DECISION MAKING DEVELOPED COUNTRIES DEVELOPING COUNTRIES DIMINISHING RETURNS DROUGHT DYNAMIC PANEL ECONOMIC ACTIVITY ECONOMIC GROWTH EGS EMPIRICAL EVIDENCE EMPIRICAL RESEARCH EMPIRICAL RESULTS EMPIRICAL STUDIES EMPIRICAL SUPPORT EMPIRICAL WORK EQUITABLE DISTRIBUTION EXTERNALITIES FAMINE GROWTH PROCESS GROWTH PROSPECTS GROWTH RATE GROWTH RATES GROWTH REGRESSION HOUSEHOLD CONSUMPTION HOUSEHOLD DATA HOUSEHOLD INCOME HUMAN CAPITAL IDIOSYNCRATIC SHOCKS IMPACT OF INEQUALITY INCOME INCOME GROUPS INCOME INEQUALITY INCOME RISK INCOME SHOCKS INCOME SUPPORT INCOME TRANSFERS INCOMES INDICATOR TARGETING INEQUALITY INEQUALITY REDUCTION INFLATION INSURANCE INVESTMENT OPPORTUNITIES INVOLUNTARY UNEMPLOYMENT LABOR FORCE LAND INEQUALITY LINK BETWEEN INEQUALITY AND GROWTH LOW INCOME MARKET FAILURES MARKET IMPERFECTIONS MEAN INCOME MEANS TESTING MEANS TESTS MEASUREMENT ERRORS MEASUREMENT PROBLEMS NEGATIVE CORRELATION NEGATIVE SHOCK NUTRITIONAL STATUS POLICY CIRCLES POLICY DESIGN POLICY IMPLICATIONS POLICY INTERVENTION POLICY INTERVENTIONS POLICY MAKERS POLICY OPTIONS POLICY RESEARCH POLITICAL ECONOMY POLITICAL SUPPORT POOR POOR AREAS POOR COUNTRIES POOR GROWTH POOR PEOPLE POPULATION SHARE POVERTY INDEX POVERTY LEVELS POVERTY REDUCTION POVERTY REDUCTION OBJECTIVE POVERTY REDUCTION STRATEGY PRODUCTIVE ACTIVITY PRODUCTIVE OPPORTUNITIES PRODUCTIVITY PUBLIC SPENDING RANDOM WALK REDISTRIBUTIVE POLICIES REDISTRIBUTIVE POLICY REDUCING INEQUALITY REDUCING POVERTY RISING INEQUALITY SAFETY NETS SAVINGS SOCIAL COSTS TARGETED TRANSFERS TARGETING TARGETING MECHANISMS TAXATION THEORETICAL MODELS TRANSFER PROGRAMS UNEMPLOYMENT WAGES RISK MANAGEMENT ADMINISTRATIVE COSTS
Online Access:	http://documents.worldbank.org/curated/en/2003/05/2360829/targeted-transfers-poor-countries-revisiting-tradeoffs-policy-options http://hdl.handle.net/10986/18213

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Summary:	Two tradeoffs have been widely seen to severely constrain the scope for attacking poverty using redistributive transfers in poor countries: an equity-efficiency tradeoff and an insurance-efficiency tradeoff. The author provides a critical overview of recent theoretical and empirical work that has called into question the extent of these tradeoffs in poor countries. He argues that these aggregate tradeoffs are often exaggerated. Indeed, they may not even be binding constraints in practice, given market failures. There appears to be scope for using carefully designed transfer schemes as an effective tool against both transient and chronic poverty. However, the same factors that weaken the tradeoffs also suggest that efficient redistributive policies might look rather different to the programs often found in practice.

Targeted Transfers in Poor Countries : Revisiting the Tradeoffs and Policy Options

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