Public spending programs aimed at alleviating poverty can either be broadly targeted at categories of spending or narrowly targeted at types of people. Each approach has benefits and costs to the poor. It is often claimed that narrow targeting of the poor will allow governments to reduce poverty more effectively and at lower cost. But narrow targeting often has hidden costs, and once these costs are considered, the most finely targeted policy may not have any more effect on poverty than a broadly targeted one. Both approaches also have hidden benefits, although less is known about their impact. Targeting can help, but it is not a cure-all. Reducing poverty calls for broadly targeted social sector spending combined with narrower targeting of cash and in-kind transfers to specific groups. It is also important for governments to experiment with schemes that offer better incentives, to carefully monitor the costs and outcomes, and to be flexible and pragmatic in their policy responses. Copyright 1998 by Oxford University Press.
Volume (Year): 13 (1998)
Issue (Month): 2 (August)
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- Martin Ravallion & Gaurav Datt, 1995. "Is Targeting Through a Work Requirement Efficient? Some Evidence for Rural India," Monash Economics Working Papers archive-41, Monash University, Department of Economics.
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- Besley, T. & Coate, S., 1989. "Workfare Vs. Welfare: Incentive Arguments For Work Requirements In Poverty Alleviation Programs," The Warwick Economics Research Paper Series (TWERPS) 314, University of Warwick, Department of Economics.
- Tuck, L. & Lindert, K., 1996. "From Universal Food Subsidies to a Self-Targeted Program: A Case Study in Tunisian Reform," World Bank - Discussion Papers 351, World Bank.
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- Datt, Gaurav*Ravallion, Martin, 1990. "Regional disparities, targeting, and poverty in India," Policy Research Working Paper Series 375, The World Bank. Full references (including those not matched with items on IDEAS)
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