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Community And Anti-Poverty Targeting

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  • Dasgupta, Indraneel
  • Kanbur, Ravi

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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Paper provided by Cornell University, Department of Applied Economics and Management in its series Working Papers with number 127774.

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Date of creation: Nov 2003
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Handle: RePEc:ags:cudawp:127774

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Keywords: Community; Inequality; Anti-poverty Targeting; Local Public Good.; Community/Rural/Urban Development; Food Security and Poverty; D31; D63; D74; Z13.;

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References

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  1. Dasgupta, Indraneel & Kanbur, Ravi, 2001. "Class, Community, Inequality," Working Papers 127671, Cornell University, Department of Applied Economics and Management.
  2. 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.
  3. Alberto Alesina & Reza Baqir & William Easterly, 1999. "Public Goods And Ethnic Divisions," The Quarterly Journal of Economics, MIT Press, vol. 114(4), pages 1243-1284, November.
  4. Basu, Kaushik & Foster, James E., 1998. "On measuring literacy," Policy Research Working Paper Series 1997, The World Bank.
  5. 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.
  6. Dasgupta, Indraneel & Kanbur, Ravi, 2003. "Bridging Communal Divides: Separation, Patronage, Integration," Working Papers 127235, Cornell University, Department of Applied Economics and Management.
  7. 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.
  8. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
  9. 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.
  10. Ravallion, Martin, 1999. "Are poorer states worse at targeting their poor?," Economics Letters, Elsevier, vol. 65(3), pages 373-377, December.
  11. La Ferrara, Eliana & Alesina, Alberto, 2000. "Participation in Heterogeneous Communities," Scholarly Articles 4551796, Harvard University Department of Economics.
  12. 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.
  13. Alberto Alesina & Eliana La Ferrara, 2000. "Participation In Heterogeneous Communities," The Quarterly Journal of Economics, MIT Press, vol. 115(3), pages 847-904, August.
  14. Ravallion, Martin & Lokshin, Michael, 2003. "On the utility consistency of poverty lines," Policy Research Working Paper Series 3157, The World Bank.
  15. Sen, Amartya K, 1976. "Poverty: An Ordinal Approach to Measurement," Econometrica, Econometric Society, vol. 44(2), pages 219-31, March.
  16. François BOURGUIGNON & Gary S. FIELDS, 1990. "Poverty Measures and Anti-Poverty Policy," Discussion Papers (REL - Recherches Economiques de Louvain) 1990038, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  17. 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.
  18. 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.
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