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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

Suggested Citation

  • 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. Lanjouw, Peter & Ravallion, Martin, 1998. "Benefit incidence and the timing of program capture," Policy Research Working Paper Series 1956, The World Bank.
    2. De Donder, Philippe & Hindriks, Jean, 1998. "The Political Economy of Targeting," Public Choice, Springer, vol. 95(1-2), pages 177-200, April.
    3. Ravallion, Martin, 1999. "Are poorer states worse at targeting their poor?," Economics Letters, Elsevier, vol. 65(3), pages 373-377, December.
    4. Ravallion, Martin, 2000. "Monitoring Targeting Performance When Decentralized Allocations to the Poor Are Unobserved," World Bank Economic Review, World Bank Group, vol. 14(2), pages 331-345, May.
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    Cited by:

    1. Martin Ravallion, 2002. "Are the Poor Protected from Budget Cuts? Evidence for Argentina," Journal of Applied Economics, Universidad del CEMA, vol. 5, pages 95-121, May.
    2. 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.
    3. Bardhan, Pranab & Mookherjee, Dilip, 2005. "Decentralizing antipoverty program delivery in developing countries," Journal of Public Economics, Elsevier, vol. 89(4), pages 675-704, April.
    4. Ravallion,Martin, 2000. "Are the poor protected from budget cuts? theory and evidence for Argentina," Policy Research Working Paper Series 2391, The World Bank.
    5. Elbers, Chris & Lanjouw, Peter & Mistiaen, Johan & Özler, Berk & Simler, Kenneth, 2003. "Are neighbors equal?," FCND briefs 147, International Food Policy Research Institute (IFPRI).
    6. Ravallion, Martin, 1999. "Are poorer states worse at targeting their poor?," Economics Letters, Elsevier, vol. 65(3), pages 373-377, December.
    7. 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.
    8. 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.
    9. Elbers, Chris & Lanjouw, Peter & Mistiaen, Johan & Ozler, Berk & Simler, Kenneth, 2003. "Are Neighbours Equal? Estimating Local Inequality in Three Developing Countries," WIDER Working Paper Series 052, World Institute for Development Economic Research (UNU-WIDER).
    10. 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).
    11. 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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    Keywords

    targeting; poverty; political-economy; Argentina;

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