Advanced Search
MyIDEAS: Login to save this paper or follow this series

The Income Lever and the Allocation of Aid

Contents:

Author Info

  • Lidia Ceriani

    (Bocconi University, Milan, Italy)

  • Paolo Verme

    (The World Bank, Washington DC, USA)

Abstract

The paper develops a concept and a measure of the monetary capacity of a country to reduce its own poverty and shows how these tools can be used to guide budget allocations or the distribution of Aid. We call this concept the income lever and define it as the relation between the welfare of the poor and the welfare of the non-poor in a given society. Making use of tax and distributive theory, the paper shows how to different redistributive criteria correspond different normative criteria of income lever. We then construct various income lever indexes based on these criteria and use such indexes to rank countries according to their own monetary poverty reduction capacity. As shown in the empirical application, this methodology can provide an equitable tool to rank countries or regions when it comes to budget or Aid allocations, whether it is the allocation of social funds within the European Union (North-North transfers) or the allocation of Aid from rich to poor countries (North-South transfers).

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.ecineq.org/milano/WP/ECINEQ2013-286.pdf
Download Restriction: no

Bibliographic Info

Paper provided by ECINEQ, Society for the Study of Economic Inequality in its series Working Papers with number 286.

as in new window
Length: 30 pages
Date of creation: Jan 2013
Date of revision:
Handle: RePEc:inq:inqwps:ecineq2013-286

Contact details of provider:
Email:
Web page: http://www.ecineq.org
More information through EDIRC

Related research

Keywords: Aid distribution; poverty reduction; redistribution policies.;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Hristos Doucouliagos & Martin Paldam, 2005. "Aid Effectiveness on Growth. A Meta Study," Economics Working Papers, School of Economics and Management, University of Aarhus 2005-13, School of Economics and Management, University of Aarhus.
  2. William Easterly & Ross Levine & David Roodman, 2004. "Aid, Policies, and Growth: Comment," American Economic Review, American Economic Association, American Economic Association, vol. 94(3), pages 774-780, June.
  3. Stijn Claessens & Danny Cassimon & Bjorn Van Campenhout, 2009. "Evidence on Changes in Aid Allocation Criteria," World Bank Economic Review, World Bank Group, World Bank Group, vol. 23(2), pages 185-208, June.
  4. Ale Bulir & A. Javier Hamann, 2003. "Aid Volatility: An Empirical Assessment," IMF Staff Papers, Palgrave Macmillan, vol. 50(1), pages 4.
  5. Llavador, Humberto G. & Roemer, John E., 2001. "An equal-opportunity approach to the allocation of international aid," Journal of Development Economics, Elsevier, Elsevier, vol. 64(1), pages 147-171, February.
  6. Alberto Alesina & David Dollar, 1998. "Who Gives Foreign Aid to Whom and Why?," NBER Working Papers 6612, National Bureau of Economic Research, Inc.
  7. Eisenhauer, Joseph G., 2011. "The rich, the poor, and the middle class: Thresholds and intensity indices," Research in Economics, Elsevier, Elsevier, vol. 65(4), pages 294-304, December.
  8. David Fielding & George Mavrotas, 2008. "Aid Volatility and Donor-Recipient Characteristics in 'Difficult Partnership Countries'," Economica, London School of Economics and Political Science, London School of Economics and Political Science, vol. 75(299), pages 481-494, 08.
  9. Peichl, Andreas & Pestel, Nico, 2011. "Multidimensional Affluence: Theory and Applications to Germany and the US," IZA Discussion Papers 5926, Institute for the Study of Labor (IZA).
  10. Michal Brzezinski, 2010. "Income Affluence in Poland," Social Indicators Research, Springer, Springer, vol. 99(2), pages 285-299, November.
  11. Nunnenkamp, Peter & Thiele, Rainer, 2006. "Targeting aid to the needy and deserving : nothing but promises?," Open Access Publications from Kiel Institute for the World Economy, Kiel Institute for the World Economy (IfW) 3875, Kiel Institute for the World Economy (IfW).
  12. John Quiggin & Renuka Mahadevan, 2010. "The Poverty Burden: A Measure of the Difficulty of Ending Extreme Poverty," Australian Public Policy Program Working Papers WPP10_2, Risk and Sustainable Management Group, University of Queensland.
  13. Denis Cogneau & Jean-David Naudet, 2004. "Who deserves aid? Equality of opportunity,international aid and poverty reduction," Working Papers, DIAL (Développement, Institutions et Mondialisation) DT/2004/10, DIAL (Développement, Institutions et Mondialisation).
  14. Chauvet, Lisa, 2003. "Socio-political instability and the allocation of international aid by donors," European Journal of Political Economy, Elsevier, vol. 19(1), pages 33-59, March.
  15. Marcelo Medeiros, 2006. "The Rich and the Poor: The Construction of an Affluence Line from the Poverty Line," Social Indicators Research, Springer, Springer, vol. 78(1), pages 1-18, 08.
  16. Burnside, Craig & Dollar, David, 1997. "Aid, policies, and growth," Policy Research Working Paper Series 1777, The World Bank.
  17. Andreas Peichl, 2007. "Measuring richness," German Stata Users' Group Meetings 2007, Stata Users Group 06, Stata Users Group.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:inq:inqwps:ecineq2013-286. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Maria Ana Lugo).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.