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Regional disparities, targeting, and poverty in India

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Author Info
Datt, Gaurav
Ravallion, Martin

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Abstract

How much can India reduce poverty nationwide by manipulating the distribution of income between regions or sectors? What is the overall effect on the poor of targeting resources toward the poorer states of India - or toward the generally poorer rural sector. Given real constraints on policy changes, it can be argued that the costs and the benefits of regional policies will tend to be borne widely within regions. Some benefits are likely to leak to the nonpoor in recipient regions, and some costs to the poor in donor regions. This paper's simulations suggest that the quantitative potential for alleviating national poverty through purely regional redistributive policies is small. Even assuming no political problems, the maximum impact on poverty is nomore than could be achieved simply by giving everyone a uniform (untargeted) windfall gain equal to about 1.5 percent of India's mean consumption. And other considerations - including increased migration to areas of higher benefits - make it unlikely that the maximum impact will be attained in practice. Greater alleviation of poverty requires supplementary interventions that reach the poor within regions, by reducing the costs borne by the poor in donor regions and enhancing benefits to the poor in recipient regions.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 375.

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Date of creation: 31 Mar 1990
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Handle: RePEc:wbk:wbrwps:375

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Related research
Keywords: Poverty Assessment; Environmental Economics&Policies; Achieving Shared Growth; Services&Transfers to Poor; Rural Poverty Reduction;

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References listed on IDEAS
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.:
  1. Ravallion, Martin, 1984. "How Much Is a Transfer Payment Worth to a Rural Worker?," Oxford Economic Papers, Oxford University Press, vol. 36(3), pages 478-89, November. [Downloadable!] (restricted)
  2. Ravallion, Martin, 1988. "Expected Poverty under Risk-Induced Welfare Variability," Economic Journal, Royal Economic Society, vol. 98(393), pages 1171-82, December. [Downloadable!] (restricted)
  3. Ravallion, Martin & Chao, Kalvin, 1989. "Targeted policies for poverty alleviation under imperfect information: Algorithms and applications," Journal of Policy Modeling, Elsevier, vol. 11(2), pages 213-224. [Downloadable!] (restricted)
  4. Ravallion, Martin, 1989. "Land-contingent poverty alleviation schemes," World Development, Elsevier, vol. 17(8), pages 1223-1233, August. [Downloadable!] (restricted)
  5. Sen, Amartya K, 1976. "Poverty: An Ordinal Approach to Measurement," Econometrica, Econometric Society, vol. 44(2), pages 219-31, March. [Downloadable!] (restricted)
  6. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May. [Downloadable!] (restricted)
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Cited by:
(explanations, 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.)

  1. Jonathan Beynon, 2003. "Poverty Efficient Aid Allocations - Collier/Dollar Revisited," Working Papers 2, Economics and Statistics Analysis Unit (ESAU), Overseas Development Institute. [Downloadable!]
  2. Heba El Laithy & Khalid Abu-Ismail & Kamal Hamdan, 2008. "Poverty, Growth and Income Distribution in Lebanon," Country Study 13, International Policy Centre for Inclusive Growth. [Downloadable!]
  3. Sudharshan Canagarajah & Saji Thomas, 2002. "Poverty in a Wealthy Economy: The Case of Nigeria," IMF Working Papers 02/114, International Monetary Fund. [Downloadable!]
  4. Collier, Paul & Dollar, David, 2000. "Can the world cut poverty in half ? how policy reform and effective aid can meet international development goals," Policy Research Working Paper Series 2403, The World Bank. [Downloadable!]
    Other versions:
  5. Datt, Gaurav & Gunewardena, Dileni, 1997. "Some aspects of poverty in Sri Lanka : 1985-90," Policy Research Working Paper Series 1738, The World Bank. [Downloadable!]
  6. Christophe Muller, 2008. "Anti-Poverty Transfers without Riots in Tunisia," Working Papers. Serie AD 2008-08, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
    Other versions:
  7. van de Walle, Dominique, 1998. "Targeting Revisited," World Bank Research Observer, Oxford University Press, vol. 13(2), pages 231-48, August. [Downloadable!]
  8. Ravallion, Martin, 1991. "The challenging arithmetic of poverty in Bangladesh," Policy Research Working Paper Series 586, The World Bank. [Downloadable!]
  9. Farhad Noorbakhsh, . "The Dynamics of Spatial Inequality and Polarisation in Iran," Working Papers 2003_17, Department of Economics, University of Glasgow. [Downloadable!]
  10. van de Walle, Dominique, 1995. "Public spending and the poor : what we know, what we need to know," Policy Research Working Paper Series 1476, The World Bank. [Downloadable!]
  11. Ravallion, 1999. "Monitoring targeting performance when decentralized allocation to the poor are unobserved," Policy Research Working Paper Series 2080, The World Bank. [Downloadable!]
  12. Ravallion, Martin, 1998. "Reaching poor areas in a federal system," Policy Research Working Paper Series 1901, The World Bank. [Downloadable!]
  13. Minot, Nicholas, 1998. "Generating disaggregated poverty maps," MTID discussion papers 25, International Food Policy Research Institute (IFPRI). [Downloadable!]
  14. Datt, Gaurav & Ravallion, Martin, 1997. "Why have some Indian states performed better than others at reducing rural poverty?," FCND discussion papers 26, International Food Policy Research Institute (IFPRI). [Downloadable!]
  15. Andrew McKay & Sarmistha Pal, 2003. "Relationships between consumption and inequality in the Indian states," Development and Comp Systems 0309005, EconWPA. [Downloadable!]
  16. Jalan, Jyotsna & Ravallion, Martin, 1996. "Are there dynamic gains from a poor-area development program?," Policy Research Working Paper Series 1695, The World Bank. [Downloadable!]
    Other versions:
  17. Ravallion, Martin & Datt, Gaurav & van de Walle, Dominique & Chan, Elaine, 1991. "Quantifying the magnitude and severity of absolute poverty in the developing world in the mid-1980s," Policy Research Working Paper Series 587, The World Bank. [Downloadable!]
  18. Christophe Muller & Sami Bibi, 2006. "Focused Targeting against Poverty Evidence from Tunisia," IDEP Working Papers 0602, Institut d'economie publique (IDEP), Marseille, France, revised Apr 2006. [Downloadable!]
    Other versions:
  19. Schady, Norbert R., 2000. "Picking the poor : indicators for geographic targeting in Peru," Policy Research Working Paper Series 2477, The World Bank. [Downloadable!]
    Other versions:
  20. Collier, Paul & Dollar, David, 1999. "Aid allocation and poverty reduction," Policy Research Working Paper Series 2041, The World Bank. [Downloadable!]
    Other versions:
  21. Datt, Gaurav & Ravallion, Martin, 1996. "Why have some Indian states done better than others at reducing rural poverty?," Policy Research Working Paper Series 1594, The World Bank. [Downloadable!]
    Other versions:
  22. Ravallion, Martin, 2000. "Monitoring Targeting Performance When Decentralized Allocations to the Poor Are Unobserved," World Bank Economic Review, Oxford University Press, vol. 14(2), pages 331-45, May. [Downloadable!]
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