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Evaluating Alternative Approaches to Poverty Alleviation: Rice Tariffs Versus Targeted Transfers in Madagascar

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  • Paul A. Dorosh
  • Mr. David Coady
  • Bart Minten

Abstract

This paper uses a partial equilibrium framework to evaluate the relative efficiency, distributional and revenue implications of rice tariffs and targeted transfers in Madagascar, especially in the context of identifying their respective roles for poverty alleviation. Although there are likely to be substantial efficiency gains from tariff reductions, these accrue mainly to higher income households. In addition, poor net rice sellers will lose from lower tariffs. Developing a system of well designed and implemented targeted direct transfers to poor households is thus likely to be a substantially more costeffective approach to poverty alleviation. Such an approach should be financed by switching revenue raising from rice tariffs to more efficient tax instruments. These policy conclusions are likely to be robust to the incorporation of general equilibrium considerations.

Suggested Citation

  • Paul A. Dorosh & Mr. David Coady & Bart Minten, 2008. "Evaluating Alternative Approaches to Poverty Alleviation: Rice Tariffs Versus Targeted Transfers in Madagascar," IMF Working Papers 2008/009, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2008/009
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    References listed on IDEAS

    as
    1. David Coady & Emmanuel Skoufias, 2004. "On the Targeting and Redistributive Efficiencies of Alternative Transfer Instruments," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 50(1), pages 11-27, March.
    2. David P. Coady & Rebecca L. Harris, 2004. "Evaluating transfer programmes within a general equilibrium framework," Economic Journal, Royal Economic Society, vol. 114(498), pages 778-799, October.
    3. Dreze, Jean & Stern, Nicholas, 1987. "The theory of cost-benefit analysis," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 2, chapter 14, pages 909-989, Elsevier.
    4. 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.
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    Cited by:

    1. Jossie Randriamiandrisoa & Jérôme Ballet, 2019. "Solidarities towards disadvantaged households. The case of households headed by women," Cahiers du GREThA (2007-2019) 2019-08, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).

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