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Who is protected from budget cuts?


  • Martin Ravallion


Standard policy advice at times of fiscal adjustment is to protect public spending on the poor. However, the political economy of fiscal adjustment could well indicate the opposite direction, to protect the non-poor from adjustment. This point is illustrated by three case studies based on research on social programs in Argentina, Bangladesh, and India, focusing on how targeting performance varied with aggregate outlays. The results suggest a tendency for program spending on the non-poor that is protected from budget cuts.

Suggested Citation

  • Martin Ravallion, 2004. "Who is protected from budget cuts?," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 7(2), pages 109-122.
  • Handle: RePEc:taf:jpolrf:v:7:y:2004:i:2:p:109-122 DOI: 10.1080/1384128042000242397

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    References listed on IDEAS

    1. Raymond Vreeland, James, 2002. "The Effect of IMF Programs on Labor," World Development, Elsevier, vol. 30(1), pages 121-139, January.
    2. Lanjouw, Peter & Pradhan, Menno & Saadah, Fadia & Sayed, Haneen & Sparrow, Robert, 2001. "Poverty, education, and health in Indonesia : who benefits from public spending?," Policy Research Working Paper Series 2739, The World Bank.
    3. Jalan, Jyotsna & Ravallion, Martin, 2003. "Estimating the Benefit Incidence of an Antipoverty Program by Propensity-Score Matching," Journal of Business & Economic Statistics, American Statistical Association, vol. 21(1), pages 19-30, January.
    4. Dilip Mookherjee & Pranab K. Bardhan, 2000. "Capture and Governance at Local and National Levels," American Economic Review, American Economic Association, vol. 90(2), pages 135-139, May.
    5. Galasso, Emanuela & Ravallion, Martin, 2005. "Decentralized targeting of an antipoverty program," Journal of Public Economics, Elsevier, vol. 89(4), pages 705-727, April.
    6. Bidani, Benu & Ravallion, Martin, 1997. "Decomposing social indicators using distributional data," Journal of Econometrics, Elsevier, vol. 77(1), pages 125-139, March.
    7. Lanjouw, Peter & Ravallion, Martin, 1998. "Benefit incidence and the timing of program capture," Policy Research Working Paper Series 1956, The World Bank.
    8. Ravallion, Martin & Wodon, Quentin, 2000. "Does Child Labour Displace Schooling? Evidence on Behavioural Responses to an Enrollment Subsidy," Economic Journal, Royal Economic Society, vol. 110(462), pages 158-175, March.
    9. 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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    Cited by:

    1. MENON Martina & PERALI Federico & SIERMINSKA Eva, 2016. "An Asset-based Indicator of Wellbeing for a Unified Means Testing Tool: Money Metric or Counting Approach?," LISER Working Paper Series 2016-09, LISER.
    2. Gordon Roger H., 2010. "Public Finance and Economic Development: Reflections based on Experience in China," Journal of Globalization and Development, De Gruyter, vol. 1(1), pages 1-29, January.
    3. Robert Lavigne, 2006. "The Institutional and Political Determinants of Fiscal Adjustment," Staff Working Papers 06-1, Bank of Canada.
    4. Krishna, Anirudh, 2007. "For Reducing Poverty Faster: Target Reasons Before People," World Development, Elsevier, vol. 35(11), pages 1947-1960, November.

    More about this item


    Fiscal incidence; Poverty; Social spending; Adjustment; Budget cuts; JEL Codes: E62; H22; I38;

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs


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