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Could the Behavioral Responses Justify the Absence of Direct Transfers to Fight Poverty in MENA Region?

Listed author(s):
  • Sami Bibi

    ()

    (CIRPEE and PEP,University of Laval, Quebec, Canada)

While cash transfers through proxy means tests have increased over the last decade in Latin America to fight poverty, consumption subsidies remain the common form of redistributive income in most MENA countries. There may be many reasons for this such as their administrative costs, effects on labor supply and private transfers, and the absence of political support for more targeted programs. The literature offers several ex post approaches to capture the behavioral responses cost of implemented socio-demographic targeting transfers. In this paper, we suggest an ex ante approach to judge whether the behavioral incidence of counterfactual socio-demographic targeting transfers may explain the absence of this policy intervention. Our methodology is illustrated using a household survey from Tunisia and counterfactual direct transfers based upon socio-demographic targeting. The results suggest that poverty could be decreased robustly by adopting the counterfactual design even if it leads to stronger behavioral responses when compared to the consumption subsidy program. However, more targeted transfers will not automatically meet with the approval of the majority of citizens.

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Paper provided by Economic Research Forum in its series Working Papers with number 396.

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Length: 21
Date of creation: 03 Jan 2008
Date of revision: 03 Jan 2008
Publication status: Published by The Economic Research Forum (ERF)
Handle: RePEc:erg:wpaper:396
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  1. Francois Bourguignon & Luiz A. Pereira da Silva, 2003. "The Impact of Economic Policies on Poverty and Income Distribution : Evaluation Techniques and Tools," World Bank Publications, The World Bank, number 15090, September.
  2. Sergei Soares & Rafael Guerreiro Osório & Fábio Veras Soares & Marcelo Medeiros & Eduardo Zepeda, 2009. "Conditional cash transfers in Brazil, Chile and Mexico: impacts upon inequality," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 0(Special i), pages 207-224.
  3. Atkinson, A B, 1987. "On the Measurement of Poverty," Econometrica, Econometric Society, vol. 55(4), pages 749-764, July.
  4. 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.
  5. Bibi Sami, 2003. "On the Impact of Better Targeted Transfers on Poverty in Tunisia," Review of Middle East Economics and Finance, De Gruyter, vol. 1(1), pages 17-35, January.
  6. Christophe Muller & Sami Bibi, 2006. "Focused Targeting against Poverty Evidence from Tunisia," IDEP Working Papers 0602, Institut d'economie publique (IDEP), Marseille, France, revised Apr 2006.
  7. Grosh, M.E. & Baker, J.L., 1995. "Proxy Means Tests for Targetting Social Programs. Simulations and Speculation," Papers 118, World Bank - Living Standards Measurement.
  8. Sen, Amartya K, 1976. "Poverty: An Ordinal Approach to Measurement," Econometrica, Econometric Society, vol. 44(2), pages 219-231, March.
  9. 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.
  10. Zheng, Buhong, 1997. " Aggregate Poverty Measures," Journal of Economic Surveys, Wiley Blackwell, vol. 11(2), pages 123-162, June.
  11. Zheng, Buhong, 2000. " Poverty Orderings," Journal of Economic Surveys, Wiley Blackwell, vol. 14(4), pages 427-466, September.
  12. King, Mervyn A., 1983. "Welfare analysis of tax reforms using household data," Journal of Public Economics, Elsevier, vol. 21(2), pages 183-214, July.
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