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Targeted transfers in poor countries : revisiting the tradeoffs and policy options

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  • Ravallion, Martin

Abstract

Two tradeoffs have been widely seen to severely constrain the scope for attacking poverty using redistributive transfers in poor countries: an equity-efficiency tradeoff and an insurance-efficiency tradeoff. The author provides a critical overview of recent theoretical and empirical work that has called into question the extent of these tradeoffs in poor countries. He argues that these aggregate tradeoffs are often exaggerated. Indeed, they may not even be binding constraints in practice, given market failures. There appears to be scope for using carefully designed transfer schemes as an effective tool against both transient and chronic poverty. However, the same factors that weaken the tradeoffs also suggest that efficient redistributive policies might look rather different to the programs often found in practice.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3048.

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Date of creation: 31 May 2003
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Handle: RePEc:wbk:wbrwps:3048

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Keywords: Health Economics&Finance; Environmental Economics&Policies; Labor Policies; Services&Transfers to Poor; Poverty Impact Evaluation; Safety Nets and Transfers; Services&Transfers to Poor; Rural Poverty Reduction; Environmental Economics&Policies; Inequality;

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Cited by:
  1. 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, Elsevier, vol. 36(4), pages 641-658, April.
  2. Haagh, Louise, 2011. "Working Life, Well-Being and Welfare Reform: Motivation and Institutions Revisited," World Development, Elsevier, Elsevier, vol. 39(3), pages 450-473, March.
  3. 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, World Institute for Development Economic Research (UNU-WIDER) RP2006/111, World Institute for Development Economic Research (UNU-WIDER).
  4. Kazianga, H., 2006. "Motives for household private transfers in Burkina Faso," Journal of Development Economics, Elsevier, Elsevier, vol. 79(1), pages 73-117, February.
  5. Giuseppe Coco & Giuseppe Pignataro, 2010. "Inequality of Opportunity in the Credit Market," series, Dipartimento di Scienze Economiche e Metodi Matematici - Università di Bari 0026, Dipartimento di Scienze Economiche e Metodi Matematici - Università di Bari, revised Jan 2010.
  6. Coady, David P., 2004. "Designing and evaluating social safety nets," FCND discussion papers, International Food Policy Research Institute (IFPRI) 172, International Food Policy Research Institute (IFPRI).
  7. Richard Heeks & Shoba Arun, 2010. "Social outsourcing as a development tool: The impact of outsourcing IT services to women's social enterprises in Kerala," Journal of International Development, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 22(4), pages 441-454.
  8. Segal, Paul, 2011. "Resource Rents, Redistribution, and Halving Global Poverty: The Resource Dividend," World Development, Elsevier, Elsevier, vol. 39(4), pages 475-489, April.
  9. Stefan Dercon (QEH), . "Vulnerability: a micro perspective," QEH Working Papers, Queen Elizabeth House, University of Oxford qehwps149, Queen Elizabeth House, University of Oxford.
  10. Adrian Wood, 2004. "Making globalization work for the poor: the 2000 White Paper reconsidered," Journal of International Development, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 16(7), pages 933-937.
  11. Gentilini, Ugo & Omamo, Steven Were, 2011. "Social protection 2.0: Exploring issues, evidence and debates in a globalizing world," Food Policy, Elsevier, Elsevier, vol. 36(3), pages 329-340, June.
  12. Guy Standing, 2007. "How Cash Transfers Boost Work and Economic Security," Working Papers, United Nations, Department of Economics and Social Affairs 58, United Nations, Department of Economics and Social Affairs.
  13. Stefan Dercon (QEH), . "Risk, Growth and Poverty: what do we know, what do we need to know?," QEH Working Papers, Queen Elizabeth House, University of Oxford qehwps148, Queen Elizabeth House, University of Oxford.
  14. Milan Vodopivec, 2004. "Unemployment Insurance: Efficiency Effects and Lessons for Developing Countries," World Bank Other Operational Studies 11809, The World Bank.

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