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Is More Targeting Consistent with Less Spending?

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  • Martin Ravallion

Abstract

Economists often advise governments to target their spending better when cuts are called for. This paper asks whether that advice is consistent with a political-economy constraint that limits the welfare losses to the non-poor 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 non-poor. Some lessons are drawn for how the poor might be better protected from cuts. Copyright Kluwer Academic Publishers 1999

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  • Martin Ravallion, 1999. "Is More Targeting Consistent with Less Spending?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 6(3), pages 411-419, August.
    • Handle: RePEc:kap:itaxpf:v:6:y:1999:i:3:p:411-419
    DOI: 10.1023/A:1008763803499
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    References listed on IDEAS

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    1. Ravallion, Martin, 1999. "Are poorer states worse at targeting their poor?," Economics Letters, Elsevier, vol. 65(3), pages 373-377, December.
    2. Ravallion, Martin, 2000. "Monitoring Targeting Performance When Decentralized Allocations to the Poor Are Unobserved," The World Bank Economic Review, World Bank, vol. 14(2), pages 331-345, May.
    3. Lanjouw, Peter & Ravallion, Martin, 1998. "Benefit incidence and the timing of program capture," Policy Research Working Paper Series 1956, The World Bank.
    4. De Donder, Philippe & Hindriks, Jean, 1998. "The Political Economy of Targeting," Public Choice, Springer, vol. 95(1-2), pages 177-200, April.
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    1. Ravallion, Martin, 2002. "Are the Poor Protected from Budget Cuts? Evidence for Argentina," Journal of Applied Economics, Universidad del CEMA, vol. 5(1), pages 1-27, May.
    2. Ravallion,Martin, 2000. "Are the poor protected from budget cuts? theory and evidence for Argentina," Policy Research Working Paper Series 2391, The World Bank.
    3. Ana Corbacho & Mercedes Garcia‐Escribano & Gabriela Inchauste, 2007. "Argentina: Macroeconomic Crisis and Household Vulnerability," Review of Development Economics, Wiley Blackwell, vol. 11(1), pages 92-106, February.
    4. Elbers, Chris & Lanjouw, Peter & Mistiaen, Johan & Özler, Berk & Simler, Kenneth, 2003. "Are neighbors equal?," FCND briefs 147, International Food Policy Research Institute (IFPRI).
    5. Chikako Yamauchi, 2010. "Community-Based Targeting and Initial Local Conditions: Evidence from Indonesia's IDT Program," Economic Development and Cultural Change, University of Chicago Press, vol. 59(1), pages 95-147, October.
    6. Ravallion, Martin, 1999. "Are poorer states worse at targeting their poor?," Economics Letters, Elsevier, vol. 65(3), pages 373-377, December.
    7. Chris Elbers & Peter Lanjouw & Johan A. Mistiaen & Berk Özler & Kenneth Simler, 2003. "Are Neighbours Equal? Estimating Local Inequality in Three Developing Countries," WIDER Working Paper Series DP2003-52, World Institute for Development Economic Research (UNU-WIDER).
    8. Grégoire ROTA-GRAZIOSI & Emilie CALDEIRA, 2014. "La décentralisation dans les pays en développement : une revue de la littérature - Decentralization in developing countries: A literature review," Working Papers 201411, CERDI.
    9. Emilie Caldeira & Grégoire Rota-Graziosi, 2015. "La décentralisation dans les pays en développement : une revue de la littérature - Decentralization in developing countries: A literature review," CERDI Working papers halshs-01005204, HAL.
    10. Delfin Go & Denis Nikitin & Xiongjian Wang & Heng-fu Zou, 2007. "Poverty and Inequality in Sub-Saharan Africa: Literature Survey and Empirical Assessment," Annals of Economics and Finance, Society for AEF, vol. 8(2), pages 251-304, November.
    11. Schüring, Esther & Gassmann, Franziska, 2012. "Whom to target: an obvious choice?," MERIT Working Papers 2012-028, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    12. Mimboe, Bernard, 2021. "Is there a right time for fiscal decentralization in a developing country: a case study of Cameroon," MPRA Paper 106220, University Library of Munich, Germany.
    13. Bardhan, Pranab & Mookherjee, Dilip, 2005. "Decentralizing antipoverty program delivery in developing countries," Journal of Public Economics, Elsevier, vol. 89(4), pages 675-704, April.
    14. 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.
    15. Esther Schüring & Franziska Gassmann, 2016. "The political economy of targeting – a critical review," Development Policy Review, Overseas Development Institute, vol. 34(6), pages 809-829, November.
    16. Ortiz, Isabel, & Cummins, Matthew. & Capaldo, Jeronim. & Karunanethy, Kalaivani., 2015. "The decade of adjustment : a review of austerity trends 2010-2020 in 187 countries," ILO Working Papers 994890453402676, International Labour Organization.
    17. Galasso, Emanuela & Ravallion, Martin, 2005. "Decentralized targeting of an antipoverty program," Journal of Public Economics, Elsevier, vol. 89(4), pages 705-727, April.

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