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On The Relative Efficiency Of Cash Transfers And Subsidies

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Abstract

This paper considers the relative efficiency of cash grants and subsidies when society's goal is to raise the welfare of a household. When the head of the household makes all consumption decisions, a principal-agent problem is created: the head acts as the agent of the government in allocating the transferred resources. Subsidies to commodities with particular characteristics may be a more efficient way to guarantee that benefits are shared within the household. Though related to the old notion of paternalism, this theory leads to more specific predictions regarding the kinds of commodities that can be efficiently subsidized. Copyright 1991 by Oxford University Press.
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  • Tom Ross, 1988. "On The Relative Efficiency Of Cash Transfers And Subsidies," Carleton Industrial Organization Research Unit (CIORU) 88-04, Carleton University, Department of Economics.
    • Handle: RePEc:car:ciorup:88-04
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    Cited by:

    1. Earnhart, Dietrich, 1999. "Multiple Penalty Mechanisms in a Principal-Agent Model under Different Institutional Arrangements," Journal of Comparative Economics, Elsevier, vol. 27(1), pages 168-189, March.
    2. Nathaniel Jensen & Munenobu Ikegami & Andrew Mude, 2017. "Integrating Social Protection Strategies for Improved Impact: A Comparative Evaluation of Cash Transfers and Index Insurance in Kenya," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 42(4), pages 675-707, October.
    3. Kazianga, Harounan & de Walque, Damien & Alderman, Harold, 2009. "Educational and health impacts of two school feeding schemes : evidence from a randomized trial in rural Burkina Faso," Policy Research Working Paper Series 4976, The World Bank.
    4. Harounan Kazianga & Damien de Walque & Harold Alderman, 2009. "School Feeding Programs and th e Nutrition of Siblings: Evidence from a Randomized Trial in Rural Burkina Faso," Economics Working Paper Series 0908, Oklahoma State University, Department of Economics and Legal Studies in Business.
    5. Selden, Thomas M. & Wasylenko, Michael J., 1992. "Benefit incidence analysis in developing countries," Policy Research Working Paper Series 1015, The World Bank.

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