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Is more targeting consistent with less spending?

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  • Ravallion, Martin

Abstract

Economists often advise governments to target their spending better when cuts are called for. The author asks whether that advice is consistent with a political economy constraint that limits the welfare losses to the nonpoor from spending cuts. A simple theoretical model shows that the answer is unclear on a priori grounds and so will depend on the specifics of program design and financing. A case study for a World Bank-supported social program in Argentina illustrates how cuts can come with worse targeting performance: The allocation to the poor falls faster than that to the nonpoor. The author draws some lessons for how the poor might be better protected from cuts.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2079.

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Date of creation: 31 Mar 1999
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Handle: RePEc:wbk:wbrwps:2079

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Keywords: Poverty Reduction Strategies; Poverty Monitoring&Analysis; Public Sector Economics&Finance; Poverty Impact Evaluation; Services&Transfers to Poor; Rural Poverty Reduction; Services&Transfers to Poor; Poverty Reduction Strategies; Poverty Monitoring&Analysis; Safety Nets and Transfers;

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References

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  1. Ravallion, Martin, 1999. "Are poorer states worse at targeting their poor?," Economics Letters, Elsevier, Elsevier, vol. 65(3), pages 373-377, December.
  2. Philippe De Donder & Jean Hindriks, 1998. "The political economy of targeting," Public Choice, Springer, Springer, vol. 95(1), pages 177-200, April.
  3. Ravallion, Martin, 2000. "Monitoring Targeting Performance When Decentralized Allocations to the Poor Are Unobserved," World Bank Economic Review, World Bank Group, World Bank Group, vol. 14(2), pages 331-45, May.
  4. Lanjouw, Peter & Ravallion, Martin, 1998. "Benefit incidence and the timing of program capture," Policy Research Working Paper Series 1956, The World Bank.
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Cited by:
  1. Elbers, Chris & Lanjouw, Peter & Mistiaen, Johan & Özler, Berk & Simler, Kenneth, 2003. "Are neighbors equal?," FCND discussion papers, International Food Policy Research Institute (IFPRI) 147, International Food Policy Research Institute (IFPRI).
  2. Bardhan, Pranab & Mookherjee, Dilip, 2005. "Decentralizing antipoverty program delivery in developing countries," Journal of Public Economics, Elsevier, Elsevier, vol. 89(4), pages 675-704, April.
  3. Gabriela Inchauste & Ana Corbacho & Mercedes Garcia-Escribano, 2003. "Argentina," IMF Working Papers, International Monetary Fund 03/89, International Monetary Fund.
  4. Ravallion, Martin, 1999. "Are poorer states worse at targeting their poor?," Economics Letters, Elsevier, Elsevier, vol. 65(3), pages 373-377, December.
  5. Galasso, Emanuela & Ravallion, Martin, 2005. "Decentralized targeting of an antipoverty program," Journal of Public Economics, Elsevier, Elsevier, vol. 89(4), pages 705-727, April.
  6. Schüring, Esther & Gassmann, Franziska, 2012. "Whom to target: an obvious choice?," MERIT Working Papers 028, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  7. Sanz, Ismael & Velazquez, Francisco J, 2003. "What do OECD countries cut first at a time of fiscal adjustments? A dynamic panel data approach," University of California at Santa Barbara, Economics Working Paper Series qt4j744960, Department of Economics, UC Santa Barbara.
  8. Ravallion, Martin, 2000. "Are the poor protected from budget cuts? theory and evidence for Argentina," Policy Research Working Paper Series 2391, The World Bank.
  9. Elbers, Chris & Lanjouw, Peter & Mistiaen, Johan & Ozler, Berk & Simler, Kenneth, 2003. "Are Neighbours Equal? Estimating Local Inequality in Three Developing Countries," Working Paper Series, World Institute for Development Economic Research (UNU-WIDER) UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  10. Martin Ravallion, 2002. "Are the Poor Protected from Budget Cuts? Evidence for Argentina," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 95-121, May.

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