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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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Citations

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Cited by:
  1. 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.
  2. 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., vol. 22(4), pages 441-454.
  3. 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.
  4. Coady, David P., 2004. "Designing and evaluating social safety nets," FCND discussion papers 172, International Food Policy Research Institute (IFPRI).
  5. 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.
  6. Milan Vodopivec, 2004. "Unemployment Insurance: Efficiency Effects and Lessons for Developing Countries," World Bank Other Operational Studies 11809, The World Bank.
  7. Stefan Dercon (QEH), . "Vulnerability: a micro perspective," QEH Working Papers qehwps149, Queen Elizabeth House, University of Oxford.
  8. Guy Standing, 2007. "How Cash Transfers Boost Work and Economic Security," Working Papers 58, United Nations, Department of Economics and Social Affairs.
  9. Haagh, Louise, 2011. "Working Life, Well-Being and Welfare Reform: Motivation and Institutions Revisited," World Development, Elsevier, vol. 39(3), pages 450-473, March.
  10. 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).
  11. Segal, Paul, 2011. "Resource Rents, Redistribution, and Halving Global Poverty: The Resource Dividend," World Development, Elsevier, vol. 39(4), pages 475-489, April.
  12. Kazianga, H., 2006. "Motives for household private transfers in Burkina Faso," Journal of Development Economics, Elsevier, vol. 79(1), pages 73-117, February.
  13. Adrian Wood, 2006. "Making globalisation work for the poor: The 2000 White Paper Reconsidered," Working Papers id:501, eSocialSciences.
  14. 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.

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