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Targeted transfers in poor countries : revisiting the trade-offs and policy options

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  • Martin Ravallion

Abstract

The conventional wisdom in mainstream development policy circles is that income transfers to the poor, and safety net policies more generally, are at best a short-term palliative and at worst a waste of money. They are not seen as a core element of an effective long-term poverty reduction strategy. These views are starting to be questioned. Firstly, evidence from careful evaluations has pointed to a number of success stories. Secondly, the presumption of an overall trade-off between redistribution or insurance and growth has come to be questioned. This paper revisits the role of targeted transfers in poor countries in light of the new theories on the social costs of uninsured risks and unmitigated inequalities.This body of theory and evidence offers a new perspective on social protection policies in poor countries, suggesting that there is scope for using these policies to compensate for the market failures that help perpetuate poverty, particularly in high-inequality settings. While acknowledging caveats to policy implementation, the paper suggests that it is time for a pragmatic and open-minded approach to this class of interventions, recognizing the potentially important role they can play, but using careful design and evaluation to assure that the potential is realized.

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Bibliographic Info

Paper provided by The World Bank in its series Social Protection Discussion Papers with number 27869.

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Date of creation: 01 May 2003
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Handle: RePEc:wbk:hdnspu:27869

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Keywords: Safety Nets and Transfers; Services&Transfers to Poor; Rural Poverty Reduction; Environmental Economics&Policies; Achieving Shared Growth;

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References

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Citations

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Cited by:
  1. Kazianga, H., 2006. "Motives for household private transfers in Burkina Faso," Journal of Development Economics, Elsevier, vol. 79(1), pages 73-117, February.
  2. Segal, Paul, 2011. "Resource Rents, Redistribution, and Halving Global Poverty: The Resource Dividend," World Development, Elsevier, vol. 39(4), pages 475-489, April.
  3. Gentilini, Ugo & Omamo, Steven Were, 2011. "Social protection 2.0: Exploring issues, evidence and debates in a globalizing world," Food Policy, Elsevier, vol. 36(3), pages 329-340, June.
  4. Coady, David P., 2004. "Designing and evaluating social safety nets," FCND discussion papers 172, International Food Policy Research Institute (IFPRI).
  5. Álvarez, Carola & Devoto, Florencia & Winters, Paul, 2008. "Why do Beneficiaries Leave the Safety Net in Mexico? A Study of the Effects of Conditionality on Dropouts," World Development, Elsevier, vol. 36(4), pages 641-658, April.
  6. Giuseppe Coco & Giuseppe Pignataro, 2010. "Inequality of Opportunity in the Credit Market," series 0026, Dipartimento di Scienze Economiche e Metodi Matematici - Università di Bari, revised Jan 2010.
  7. Brown, Lynn & Gentilini, Ugo, 2006. "On the Edge: The Role of Food-based Safety Nets in Helping Vulnerable Households Manage Food Insecurity," Working Paper Series RP2006/111, World Institute for Development Economic Research (UNU-WIDER).
  8. Stefan Dercon (QEH), . "Vulnerability: a micro perspective," QEH Working Papers qehwps149, Queen Elizabeth House, University of Oxford.
  9. Adrian Wood, 2004. "Making globalization work for the poor: the 2000 White Paper reconsidered," Journal of International Development, John Wiley & Sons, Ltd., vol. 16(7), pages 933-937.
  10. Guy Standing, 2007. "How Cash Transfers Boost Work and Economic Security," Working Papers 58, United Nations, Department of Economics and Social Affairs.
  11. Milan Vodopivec, 2004. "Unemployment Insurance: Efficiency Effects and Lessons for Developing Countries," World Bank Other Operational Studies 11809, The World Bank.
  12. Stefan Dercon (QEH), . "Risk, Growth and Poverty: what do we know, what do we need to know?," QEH Working Papers qehwps148, Queen Elizabeth House, University of Oxford.
  13. Haagh, Louise, 2011. "Working Life, Well-Being and Welfare Reform: Motivation and Institutions Revisited," World Development, Elsevier, vol. 39(3), pages 450-473, March.

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