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Cobra effect in Mexico: social expenditure and poverty, 2008-2018

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Listed:
  • Eduardo Loría
  • Eduardo Martínez

Abstract

This paper examines the efficiency of the cash transfers on multidimensional extreme poverty in the states of Mexico for 2008-2018. We estimate econometric models with panel data with OLS and 2SLS and with cross-section data with GMM that shield against endogeneity of the determinants of poverty. We prove that there are perverse incentives that have caused that transfers perpetuate poverty in the less developed states. Homicides and informal employment have perpetuated it. Agricultural labor productivity, economic growth, productive export orientation, and a better Rule of Law reduce it.

Suggested Citation

  • Eduardo Loría & Eduardo Martínez, 2021. "Cobra effect in Mexico: social expenditure and poverty, 2008-2018," Estudios de Economia, University of Chile, Department of Economics, vol. 48(2 Year 20), pages 97-137, December.
    • Handle: RePEc:udc:esteco:v:48:y:2021:i:2:p:97-137
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    File URL: https://estudiosdeeconomia.uchile.cl/index.php/EDE/article/view/64968/68345
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    More about this item

    Keywords

    Extreme multidimensional poverty; direct monetary transfers; perverse incentives; Rule of Law; structural heterogeneity.;
    All these keywords.

    JEL classification:

    • P36 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty

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