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Poverty-Efficient Transfer Programs: The Role of Targeting and Allocation Rules

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  • Duclos, Jean-Yves
  • Makdissi, Paul
  • Wodon, Quentin

Abstract

We propose simple graphical methods to identify poverty-reducing transfer program reforms. The methods are based on Program Dominance curves that display cumulative program benefits weighted by powers of poverty gaps. These curves can be decomposed simply as sums of targeting dominance curves and allocation dominance ones, and can serve to verify whether the assessment of program reforms is sensitive to the choice of poverty lines and poverty measures as well as to differences in revenue sources and behavioral impacts across programs.

Suggested Citation

  • Duclos, Jean-Yves & Makdissi, Paul & Wodon, Quentin, 2003. "Poverty-Efficient Transfer Programs: The Role of Targeting and Allocation Rules," Cahiers de recherche 0305, CIRPEE.
  • Handle: RePEc:lvl:lacicr:0305
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    References listed on IDEAS

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    1. 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.
    2. Atkinson, A B, 1987. "On the Measurement of Poverty," Econometrica, Econometric Society, vol. 55(4), pages 749-764, July.
    3. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-766, May.
    4. Mayshar, Joram & Yitzhaki, Shlomo, 1995. "Dalton-Improving Indirect Tax Reform," American Economic Review, American Economic Association, vol. 85(4), pages 793-807, September.
    5. Duclos, Jean-Yves & Makdissi, Paul & Wodon, Quentin, 2002. "Socially-Efficient Tax Reforms," Cahiers de recherche 0201, Université Laval - Département d'économique.
    6. L. Wade, 1988. "Review," Public Choice, Springer, vol. 58(1), pages 99-100, July.
    7. Kakwani, Nanok C, 1977. "Measurement of Tax Progressivity: An International Comparison," Economic Journal, Royal Economic Society, vol. 87(345), pages 71-80, March.
    8. Buhong Zheng, 1999. "On the power of poverty orderings," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 16(3), pages 349-371.
    9. Joel Slemrod & Shlomo Yitzhaki, 1996. "The Costs of Taxation and the Marginal Efficiency Cost of Funds," IMF Staff Papers, Palgrave Macmillan, vol. 43(1), pages 172-198, March.
    10. Zheng, Buhong, 2000. " Poverty Orderings," Journal of Economic Surveys, Wiley Blackwell, vol. 14(4), pages 427-466, September.
    11. Baker, Judy L. & Grosh, Margaret E., 1994. "Poverty reduction through geographic targeting: How well does it work?," World Development, Elsevier, vol. 22(7), pages 983-995, July.
    12. Russell Davidson & Jean-Yves Duclos, 2000. "Statistical Inference for Stochastic Dominance and for the Measurement of Poverty and Inequality," Econometrica, Econometric Society, pages 1435-1464.
    13. Makdissi, Paul & Wodon, Quentin, 2002. "Consumption dominance curves: testing for the impact of indirect tax reforms on poverty," Economics Letters, Elsevier, vol. 75(2), pages 227-235, April.
    14. Besley, Timothy J & Kanbur, S M Ravi, 1988. "Food Subsidies and Poverty Alleviation," Economic Journal, Royal Economic Society, vol. 98(392), pages 701-719, September.
    15. Jean-Yves Duclos & Paul Makdissi, 2004. "Restricted and Unrestricted Dominance for Welfare, Inequality, and Poverty Orderings," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 6(1), pages 145-164, February.
    16. Foster, James E & Shorrocks, Anthony F, 1988. "Poverty Orderings," Econometrica, Econometric Society, vol. 56(1), pages 173-177, January.
    17. Louise Cord & Quentin Wodon, 2001. "Do Agricultural Programs in Mexico Alleviate Poverty? Evidence from the Ejido Sector," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 38(114), pages 239-256.
    18. Thon, Dominique, 1979. "On Measuring Poverty," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 25(4), pages 429-439, December.
    19. Satya Ranjan Chakravarty, 1983. "Ethically Flexible Measures of Poverty," Canadian Journal of Economics, Canadian Economics Association, vol. 16(1), pages 74-85, February.
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    22. Quentin Wodon & Shlomo Yitzhaki, 2002. "Evaluating the Impact of Government Programs on Social Welfare: The Role of Targeting and the Allocation Rules Among Program Beneficiaries," Public Finance Review, , vol. 30(2), pages 102-123, March.
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    Cited by:

    1. François Bourguignon & Amedeo Spadaro, 2006. "Microsimulation as a tool for evaluating redistribution policies," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, pages 77-106.
    2. Paul Makdissi & Stéphane Mussard, 2006. "Between-Group Transfers and Poverty-Reducing Tax Reforms," Cahiers de recherche 06-23, Departement d'Economique de l'École de gestion à l'Université de Sherbrooke.
    3. Paul Makdissi & Myra Yazbeck, 2011. "Assessing the redistributive impact of higher education tuition fees reforms: the case of Quebec," Applied Economics Letters, Taylor & Francis Journals, vol. 18(2), pages 143-147.
    4. Mario Fortin & Andre Leclerc & Jean-Baptiste Nesmy, 2006. "L’impact des opérations transactionnelles sur la croissance de la productivité dans le secteur bancaire," Cahiers de recherche 06-01, Departement d'Economique de l'École de gestion à l'Université de Sherbrooke.
    5. Elbers, Chris & Fujii, Tomoki & Lanjouw, Peter & Ozler, Berk & Yin, Wesley, 2007. "Poverty alleviation through geographic targeting: How much does disaggregation help?," Journal of Development Economics, Elsevier, pages 198-213.
    6. Pene Kalulumia & Denis Bolduc, 2004. "Generalized Mixed Estimation Of A Multinomial Discretecontinuous Choice Model For Electricity Demand," Cahiers de recherche 04-01, Departement d'Economique de l'École de gestion à l'Université de Sherbrooke.
    7. Patrick GEORGES & Marcel MERETTE, "undated". "Demographic Changes and the Gains from Globalisation: An Overlapping Generations CGE Analysis," EcoMod2009 21500035, EcoMod.
    8. Douidich, Mohammed & Ezzrari, Abdeljouad & Lanjouw, Peter, 2008. "Simulating the impact of geographic targeting on poverty alleviation in Morocco : what are the gains from disaggregation ?," Policy Research Working Paper Series 4724, The World Bank.
    9. Stéphane Mussard & Patrick Richard, 2012. "Linking Yitzhaki's and Dagum's Gini decompositions," Applied Economics, Taylor & Francis Journals, vol. 44(23), pages 2997-3010, August.
    10. Pene Kalulumia, 2002. "Effects of government debt on interest rates: evidence from causality tests in johansen-type models," Cahiers de recherche 02-07, Departement d'Economique de l'École de gestion à l'Université de Sherbrooke.
    11. Matthieu Clément, 2005. "Dynamiques de pauvreté et transferts publics : le cas de la Russie," Documents de travail 119, Groupe d'Economie du Développement de l'Université Montesquieu Bordeaux IV.
    12. Wasiu Adekunle Are, 2012. "Poverty-Reducing Directions of Indirect Marginal Tax Reforms in Ireland," Working Papers 201230, School of Economics, University College Dublin.
    13. Paul Makdissi & Stéphane Mussard, 2008. "Analyzing the impact of indirect tax reforms on rank-dependent social welfare functions: a positional dominance approach," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 30(3), pages 385-399, April.
    14. Alfredo Serrano Mancilla, 2006. "Reformas socialmente eficientes del IVA en España," Investigaciones Economicas, Fundación SEPI, vol. 30(2), pages 381-398, May.
    15. Petr Hanel, 2003. "Impact Of Government Support Programs On Innovation By Canadian Manufacturing Firms," Cahiers de recherche 04-02, Departement d'Economique de l'École de gestion à l'Université de Sherbrooke.
    16. Paul MAKDISSI & Quentin WODON, 2003. "Robust Poverty Comparisons and Marginal Policy Reform Orderings Under Income Variability," Cahiers de recherche 03-05, Departement d'Economique de l'École de gestion à l'Université de Sherbrooke.

    More about this item

    Keywords

    Poverty; Targeting; Public Policy; Stochastic Dominance;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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