More for the poor is less for the poor : the politics of targeting
AbstractStandard economic analyses suggests that when the budget for redistribution is fixed, transfers should be targeted to (that is, means-tested for) those most in need. But both economists and political scientists have long recognized the possibility that targeting could undermine political support for redistribution, and hence reduce the available budget. The authors formalize this recognition, developing a simple economy in which both nontargeted (universally received) and targeted transfers are available. The policymaker chooses the share of the budget to be spent on each type of transfer while the budget is determined through majority voting. Their results are striking. If the policymaker ignores political feasibility and assumes that the budget is fixed, she will choose full targeting of transfers -in the process minimizing social welfare and the utility of the poor. By contrast, when the policymaker recognizes budgetary endogeneity, she will choose zero targeting, spending theentire budget on the universally received transfer. Social welfare, the budget for redistribution, and the utility of poor agents are all maximized in the resulting equilibrium.
Download InfoIf 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.
Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 1799.
Date of creation: 31 Jul 1997
Date of revision:
Environmental Economics&Policies; Services&Transfers to Poor; Health Economics&Finance; Economic Theory&Research; Poverty Impact Evaluation; Services&Transfers to Poor; Rural Poverty Reduction; Economic Theory&Research; Environmental Economics&Policies; Safety Nets and Transfers;
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.:
- Nichols, Albert L & Zeckhauser, Richard J, 1982. "Targeting Transfers through Restrictions on Recipients," American Economic Review, American Economic Association, vol. 72(2), pages 372-77, May.
- Stern, Nicholas, 1982. "Optimum taxation with errors in administration," Journal of Public Economics, Elsevier, vol. 17(2), pages 181-211, March.
- World Bank, 2001. "India - Improving Household Food and Nutrition Security : Achievements and the Challenges Ahead, Volume 1. Main Report," World Bank Other Operational Studies 15516, The World Bank.
- Pritchett, Lant & Suryahadi, Asep & Sumarto, Sudarno, 2000. "Quantifying vulnerability to poverty - a proposed measure, applied to Indonesia," Policy Research Working Paper Series 2437, The World Bank.
- Berthold, Norbert & Thode, Eric, 2000. "Umverteilung in der Mittelschicht: notwendiges Übel im Kampf gegen Armut?," Wirtschaftswissenschaftliche BeitrÃ¤ge 34, Julius-Maximilians-Universität Würzburg, Lehrstuhl für Volkswirtschaftslehre, insbes. Wirtschaftsordnung und Sozialpolitik.
- Maloney, William F., 2001. "Evaluating emergency programs," Policy Research Working Paper Series 2728, The World Bank.
- Conning, Jonathan & Kevane, Michael, 2002. "Community-Based Targeting Mechanisms for Social Safety Nets: A Critical Review," World Development, Elsevier, vol. 30(3), pages 375-394, March.
- M Lundberg & M Over & P Mujinja, 2000.
"Sources of Financial Assistance for Households Suffering an Adult Death in Kagera, Tanzania,"
South African Journal of Economics,
Economic Society of South Africa, vol. 68(5), pages 420-443, December.
- Lundberg, Mattias & Over, Mead & Mujinja, Phare, 2000. "Sources of financial assistance for households suffering an adult death in Kagera, Tanzania," Policy Research Working Paper Series 2508, The World Bank.
- Conning, Jonathan & Kevane, Michael, 2002.
"Why isn't there more Financial Intermediation in Developing Countries?,"
Working Paper Series
UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
- Jonathan Conning & Michael Kevane, 2003. "Why isn't there more Financial Intermediation in Developing Countries?," Hunter College Department of Economics Working Papers 214, Hunter College: Department of Economics.
- Beck, Thorsten & Clarke, George & Groff, Alberto & Keefer, Philip & Walsh, Patrick, 2000. "New tools and new tests in comparative political economy - the database of political institutions," Policy Research Working Paper Series 2283, The World Bank.
- Gertler, Paul J., 1998. "On the road to social health insurance: the Asian experience," World Development, Elsevier, vol. 26(4), pages 717-732, April.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi).
If references are entirely missing, you can add them using this form.