IDEAS home Printed from https://ideas.repec.org/p/ags/iffp23/16303.html

A Regional Equilibrium Analysis Of The Welfare Impact Of Cash Transfers: An Analysis Of Progresa In Mexico

Author

Listed:
  • Coady, David P.
  • Harris, Rebecca Lee

Abstract

Using a regionally disaggregated computable general equilibrium model, we analyze the differential welfare impacts of a cash transfer program targeted at rural areas. The direct effect of the transfers decreases regional income differentials, but the indirect effects depend on how the program is financed. Financing the program with a more efficient tax system is also less regressive and has favorable urban impacts. The less efficient instruments result in relatively higher incomes in all rural regions, but are more regressive. The increasing share of urban poverty highlights the shortcomings of rural targeting and raises the issue of horizontal equity.

Suggested Citation

  • Coady, David P. & Harris, Rebecca Lee, 2001. "A Regional Equilibrium Analysis Of The Welfare Impact Of Cash Transfers: An Analysis Of Progresa In Mexico," TMD Discussion Papers 16303, CGIAR, International Food Policy Research Institute (IFPRI).
    • Handle: RePEc:ags:iffp23:16303
    DOI: 10.22004/ag.econ.16303
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/16303/files/tm010076.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.16303?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Coady, David P. & Harris, Rebecca Lee, 2001. "Evaluating transfer programs within a general equilibrium framework," FCND briefs 110, International Food Policy Research Institute (IFPRI).
    2. Coady, David & Harris, Rebecca Lee, 2001. "Evaluating transfer programs within a general equilibrium framework," FCND discussion papers 110, International Food Policy Research Institute (IFPRI).
    3. Harris, Rebecca Lee, 1999. "The Distributional Impact of Macroeconomic Shocks in Mexico: Threshold Effects in a Multi-Region CGE Model," TMD Discussion Papers 97535, CGIAR, International Food Policy Research Institute (IFPRI).
    4. Coady, David P. & Harris, Rebecca Lee, 2001. "Evaluating Transfer Programs Within A General Equilibrium Framework," FCND Discussion Papers 16412, CGIAR, International Food Policy Research Institute (IFPRI).
    5. Harris, Rebecca Lee, 1999. "The distributional impact of macroeconomic shocks in Mexico: threshold effects in a multi-region CGE model," TMD discussion papers 44, International Food Policy Research Institute (IFPRI).
    6. Diamond, Peter A & Mirrlees, James A, 1971. "Optimal Taxation and Public Production II: Tax Rules," American Economic Review, American Economic Association, vol. 61(3), pages 261-278, June.
    7. David Coady, 1997. "Agricultural Pricing Policies in Developing Countries: An Application to Pakistan," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 4(1), pages 39-57, January.
    8. Diamond, Peter A & Mirrlees, James A, 1971. "Optimal Taxation and Public Production: I--Production Efficiency," American Economic Review, American Economic Association, vol. 61(1), pages 8-27, March.
    9. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    10. Harris, Rebecca Lee & Coady, David P., 2001. "Evaluating Transfer Programs Within A General Equilibrium Framework," Discussion Paper Briefs 15980, CGIAR, International Food Policy Research Institute (IFPRI).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Coady, David & Harris, Rebecca Lee, 2001. "A regional general equilibrium analysis of the welfare impact of cash transfers: an analysis of PROGRESA in Mexico," TMD discussion papers 76, International Food Policy Research Institute (IFPRI).
    2. Eirini Andriopoulou & Eleni Kanavitsa & Chrysa Leventi, 2020. "The distributional impact of recurrent immovable property taxation in Greece," Public Sector Economics, Institute of Public Finance, vol. 44(4), pages 505-528.
    3. Asano, Seki & Barbosa, Ana Luiza N. H. & Fiuza, Eduardo P. S., 2004. "Optimal Commodity Taxes for Brazil Based on AIDS Preferences," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 58(1), January.
    4. Støstad, Morten Nyborg & Cowell, Frank, 2024. "Inequality as an externality: Consequences for tax design," Journal of Public Economics, Elsevier, vol. 235(C).
    5. Bas (B.) Jacobs & Rick (F.) van der Ploeg, 2017. "Should Pollution Taxes Be Targeted At Income Redistribution?," Tinbergen Institute Discussion Papers 17-070/VI, Tinbergen Institute.
    6. C. Benassi & E. Randon, 2015. "Optimal Commodity Taxation and Income Distribution," Working Papers wp1001, Dipartimento Scienze Economiche, Universita' di Bologna.
    7. David Coady & Jean Drèze, 2000. "Commodity Taxation and Social Welfare: The Generalised Ramsey Rule," STICERD - Development Economics Papers - From 2008 this series has been superseded by Economic Organisation and Public Policy Discussion Papers 27, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    8. Hänsel, Martin C. & Franks, Max & Kalkuhl, Matthias & Edenhofer, Ottmar, 2022. "Optimal carbon taxation and horizontal equity: A welfare-theoretic approach with application to German household data," Journal of Environmental Economics and Management, Elsevier, vol. 116(C).
    9. Jacobs, Bas & van der Ploeg, Frederick, 2019. "Redistribution and pollution taxes with non-linear Engel curves," Journal of Environmental Economics and Management, Elsevier, vol. 95(C), pages 198-226.
    10. John Muellbauer, 2019. "The Political Economy of Price Indices," Cyprus Economic Policy Review, University of Cyprus, Economics Research Centre, vol. 13(1), pages 35-56, June.
    11. Antràs, Pol & de Gortari, Alonso & Itskhoki, Oleg, 2017. "Globalization, inequality and welfare," Journal of International Economics, Elsevier, vol. 108(C), pages 387-412.
    12. Coady, David & Dreze, Jean, 2000. "Commodity taxation and social welfare: the generalised Ramsey rule," LSE Research Online Documents on Economics 6651, London School of Economics and Political Science, LSE Library.
    13. Bev Dahlby & Kevin Milligan, 2017. "From theory to practice: Canadian economists contributions to public finance," Canadian Journal of Economics, Canadian Economics Association, vol. 50(5), pages 1324-1347, December.
    14. David Coady & Jean Drèze, 2002. "Commodity Taxation and Social Welfare: The Generalized Ramsey Rule," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 9(3), pages 295-316, May.
    15. David Coady & Jean Dreze, 2000. "Commodity Taxation and Social Welfare: The Generalised Ramsey Rule," Working papers 87, Centre for Development Economics, Delhi School of Economics.
    16. Odd E. Nygård & John T. Revesz, 2015. "Optimal indirect taxation and the uniformity debate: A review of theoretical results and empirical contributions," Discussion Papers 809, Statistics Norway, Research Department.
    17. David Madden & Michael Savage, 2020. "Which households matter most? Capturing equity considerations in tax reform via generalised social marginal welfare weights," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 27(1), pages 153-193, February.
    18. David Coady, 2015. "Designing and Evaluating Social Safety Nets: Theory, Evidence, and Policy Conclusions," Working Papers id:7496, eSocialSciences.
    19. David Madden, 1995. "An analysis of indirect tax reform in Ireland in the 1980s," Fiscal Studies, Institute for Fiscal Studies, vol. 16(1), pages 18-37, May.
    20. Coady, David P., 2004. "Designing And Evaluating Social Safety Nets: Theory, Evidence And Policy Conclusions," FCND Discussion Papers 16435, CGIAR, International Food Policy Research Institute (IFPRI).

    More about this item

    Keywords

    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:iffp23:16303. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/ifprius.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.