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Community and anti-poverty targeting

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  • Indraneel Dasgupta

    ()

  • Ravi Kanbur

Abstract

The standard theory of anti-poverty targeting assumes individual incomes cannot be observed, but statistical properties of income distribution in broadly defined groups are known. Targeting rules are then derived for the forms of transfers conditioned on group membership of individuals. In this literature the motivating notion of a “group” is purely statistical, even when it is groups such as localities and ethnicities. We model instead a group as a “community”, meaning thereby a collection of individuals who have access to a community-specific public good, from which non-members are excluded. Such differential access constitutes a source of inequality among poor individuals belonging to different communities. We show that this formulation of what constitutes a group changes many of the basic results of the targeting literature. Optimal targeting for poverty alleviation leads to seemingly paradoxical rules, such as targeting transfers to the community that is richer. Total wealth of non-poor members of a community and its distribution both become relevant for specifying optimal targeting rules.

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File URL: http://hdl.handle.net/10.1007/s10888-005-9005-5
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Bibliographic Info

Article provided by Springer in its journal The Journal of Economic Inequality.

Volume (Year): 3 (2005)
Issue (Month): 3 (December)
Pages: 281-302

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Handle: RePEc:kap:jecinq:v:3:y:2005:i:3:p:281-302

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Web page: http://springerlink.metapress.com/link.asp?id=111137

Related research

Keywords: anti-poverty targeting; community; inequality; local public good; D31; D63; D74; Z13;

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References

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  1. Bourguignon, F. & Fields, G.S., 1990. "Poverty Measures and Anti-Poverty Policy," DELTA Working Papers 90-04, DELTA (Ecole normale supérieure).
  2. La Ferrara, Eliana & Alesina, Alberto, 2000. "Participation in Heterogeneous Communities," Scholarly Articles 4551796, Harvard University Department of Economics.
  3. Besley, Timothy J & Kanbur, S M Ravi, 1988. "Food Subsidies and Poverty Alleviation," Economic Journal, Royal Economic Society, vol. 98(392), pages 701-19, September.
  4. Dasgupta, Indraneel & Kanbur, Ravi, 2003. "Bridging Communal Divides: Separation, Patronage, Integration," Working Papers 127235, Cornell University, Department of Applied Economics and Management.
  5. Alberto Alesina & Reza Baqir & William Easterly, 1997. "Public Goods and Ethnic Divisions," NBER Working Papers 6009, National Bureau of Economic Research, Inc.
  6. Alberto Alesina & Eliana La Ferrara, 1999. "Participation in Heterogeneous Communities," NBER Working Papers 7155, National Bureau of Economic Research, Inc.
  7. Ravallion, Martin, 1999. "Are poorer states worse at targeting their poor?," Economics Letters, Elsevier, vol. 65(3), pages 373-377, December.
  8. Kanbur, Ravi & Keen, Michael & Tuomala, Matti, 1994. "Labor Supply and Targeting in Poverty Alleviation Programs," World Bank Economic Review, World Bank Group, vol. 8(2), pages 191-211, May.
  9. Ravallion, Martin & Lokshin, Michael, 2003. "On the utility consistency of poverty lines," Policy Research Working Paper Series 3157, The World Bank.
  10. Basu, Kaushik & Foster, James E, 1998. "On Measuring Literacy," Economic Journal, Royal Economic Society, vol. 108(451), pages 1733-49, November.
  11. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
  12. Dasgupta, Indraneel & Kanbur, Ravi, 2001. "Class, Community, Inequality," Working Papers 127671, Cornell University, Department of Applied Economics and Management.
  13. Bowles, Samuel & Gintis, Herbert, 2004. "Persistent parochialism: trust and exclusion in ethnic networks," Journal of Economic Behavior & Organization, Elsevier, vol. 55(1), pages 1-23, September.
  14. 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.
  15. Dasgupta, Indraneel & Kanbur, Ravi, 2002. "How Workers Get Poor Because Capitalists Get Rich: A General Equilibrium Model of Labor Supply, Community, and the Class Distribution of Income," Working Papers 127296, Cornell University, Department of Applied Economics and Management.
  16. Sen, Amartya K, 1976. "Poverty: An Ordinal Approach to Measurement," Econometrica, Econometric Society, vol. 44(2), pages 219-31, March.
  17. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
  18. Baland, Jean-Marie & Platteau, Jean-Philippe, 2003. "Economics of common property management regimes," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 1, chapter 4, pages 127-190 Elsevier.
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Citations

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Cited by:
  1. Dasgupta, Indraneel & Kanbur, Ravi, 2007. "Should Egalitarians Expropriate Philanthropists?," CEPR Discussion Papers 6362, C.E.P.R. Discussion Papers.
  2. Dasgupta, Indraneel, 2008. "‘Living’ Wage, Class Conflict and Ethnic Strife," IZA Discussion Papers 3631, Institute for the Study of Labor (IZA).
  3. Elbers, Chris & Tomoki Fujii & Lanjouw, Peter & Ozler, Berk & Yin, Wesley, 2004. "Poverty alleviation through geographic targeting : how much does disaggregation help?," Policy Research Working Paper Series 3419, The World Bank.
  4. Suman Ghosh & Alexander Karaivanov, 2005. "Can a raise in your wage make you worse off? A public goods perspective," Working Papers 05004, Department of Economics, College of Business, Florida Atlantic University, revised Mar 2006.
  5. Indraneel Dasgupta & Ravi Kanbur, 2011. "Does philanthropy reduce inequality?," Journal of Economic Inequality, Springer, vol. 9(1), pages 1-21, March.
  6. Dasgupta, Indraneel, 2009. "Mother or Child? Intra-Household Redistribution under Gender-Asymmetric Altruism," IZA Discussion Papers 4529, Institute for the Study of Labor (IZA).
  7. Audun Langørgen, 2011. "Targeting public services through the unequal treatment of unequals," International Tax and Public Finance, Springer, vol. 18(2), pages 193-213, April.
  8. Indraneel Dasgupta, . "Women or Children? Intra-household redistribution under gender-asymmetric altruism," Discussion Papers 07/10, University of Nottingham, CREDIT.
  9. Baird, Sarah & McIntosh, Craig & Ozler, Berk, 2011. "The regressive demands of demand-driven development," Policy Research Working Paper Series 5883, The World Bank.
  10. Douidich, Mohammed & Ezzrari, Abdeljouad & Lanjouw, Peter, 2008. "Simulating the impact of geographic targeting on poverty alleviation in Morocco : what are the gains from disaggregation ?," Policy Research Working Paper Series 4724, The World Bank.
  11. Dasgupta, Indraneel & Kanbur, Ravi, 2007. "Community and Class Antagonism," Working Papers 127009, Cornell University, Department of Applied Economics and Management.
  12. Kanbur, Ravi, 2010. "Conceptualising Social Security and Income Redistribution," Working Papers 126969, Cornell University, Department of Applied Economics and Management.

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