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On the Impact of Better Targeted Transfers on Poverty in Tunisia

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  • Bibi Sami

    ()
    (Faculté des Sciences Economiques et de Gestion de Tunis)

Abstract

This paper describes the effects of general food subsidies on poverty in Tunisia, as revealed by household survey data for 1990. The analysis indicates that the poorest certainly take advantage of this system, but at the price of considerable leakages to non-poor people and at a sizable economic efficiency loss resulting from relative price distortions. Further, nonparametric estimations suggest that there are no commodities predominantly consumed by the poor. This implies that targeting by commodities is not an effective way to fight against poverty and, thus, it is unlikely that restructuring the current scheme would improve significantly the living standards of the less well-off members of society. We then investigate the impact on poverty of a more targeted transfer scheme, based on proxy means tests, using an appropriate econometric technique for modeling. Simulations show that this design would be more effective in reducing poverty than the use of general food subsidies. Finally, dominance tests show that this design would first-order-dominate a food subsidies scheme within a range of poverty lines, including all those estimated and generally used for Tunisia.

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Bibliographic Info

Article provided by De Gruyter in its journal Review of Middle East Economics and Finance.

Volume (Year): 1 (2003)
Issue (Month): 1 (January)
Pages: 17-35

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Handle: RePEc:bpj:rmeecf:v:1:y:2003:i:1:n:3

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  1. Ravallion, Martin & Chao, Kalvin, 1989. "Targeted policies for poverty alleviation under imperfect information: Algorithms and applications," Journal of Policy Modeling, Elsevier, vol. 11(2), pages 213-224.
  2. Creedy, John, 1996. "Comparing Tax and Transfer Systems: Poverty, Inequality and Target Efficiency," Economica, London School of Economics and Political Science, vol. 63(250), pages S163-74, Suppl..
  3. Bigman, David & Fofack, Hippolyte, 2000. "Geographical Targeting for Poverty Alleviation: An Introduction to the Special Issue," World Bank Economic Review, World Bank Group, vol. 14(1), pages 129-45, January.
  4. Park, Albert & Wang, Sangui & Wu, Guobao, 2002. "Regional poverty targeting in China," Journal of Public Economics, Elsevier, vol. 86(1), pages 123-153, October.
  5. King, Mervyn A., 1983. "Welfare analysis of tax reforms using household data," Journal of Public Economics, Elsevier, vol. 21(2), pages 183-214, July.
  6. Glewwe, Paul, 1992. "Targeting assistance to the poor : Efficient allocation of transfers when household income is not observed," Journal of Development Economics, Elsevier, vol. 38(2), pages 297-321, April.
  7. Glewwe, P. & Kanaan, O., 1989. "Targeting Assistance to the Poor: A Multivariate Approach Using Household Survey Data," Papers 94, Warwick - Development Economics Research Centre.
  8. Rai, Ashok S., 2002. "Targeting the poor using community information," Journal of Development Economics, Elsevier, vol. 69(1), pages 71-83, October.
  9. L. Wade, 1988. "Review," Public Choice, Springer, vol. 58(1), pages 99-100, July.
  10. Atkinson, A B, 1987. "On the Measurement of Poverty," Econometrica, Econometric Society, vol. 55(4), pages 749-64, July.
  11. Sen, Amartya K, 1976. "Poverty: An Ordinal Approach to Measurement," Econometrica, Econometric Society, vol. 44(2), pages 219-31, March.
  12. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
  13. Chakravarty, Satya R. & Mukherjee, Diganta, 1998. "Optimal subsidy for the poor," Economics Letters, Elsevier, vol. 61(3), pages 313-319, December.
  14. Jenkins, Stephen P & Lambert, Peter J, 1997. "Three 'I's of Poverty Curves, with an Analysis of UK Poverty Trends," Oxford Economic Papers, Oxford University Press, vol. 49(3), pages 317-27, July.
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Cited by:
  1. Sami Bibi & Jean-Yves Duclos, 2003. "Equity and Policy Effectiveness with Imperfect Targeting," Cahiers de recherche 0335, CIRPEE.

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