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How Can Food Subsidies Work Better? Answers from India and the Philippines

Author

Listed:
  • Jha, Shikha

    (Asian Development Bank)

  • Ramaswami, Bharat

    (Indian Statistical Institute)

Abstract

This study explores the outcomes of food subsidies to the poor in the case of India and the Philippines. Both countries operate in-kind food subsidy programs with similar mandates, commonalities in functioning, and substantial budgetary outlays. The goal of the study is to quantify the gains to the poor from an additional unit of public spending on food subsidies. We find the expected income impacts on the poor are not more than 5% of incremental spending in either country. Part of the reason for such a low impact is poor participation in the program. But equally, it is also the case that the share of the poor in the total food subsidy is small. The reason why the poor receive such small shares is not just poor targeting. The main factor is program waste (due to fraud and excess costs). Such waste accounts for as much as 71% of the total public spending.

Suggested Citation

  • Jha, Shikha & Ramaswami, Bharat, 2010. "How Can Food Subsidies Work Better? Answers from India and the Philippines," ADB Economics Working Paper Series 221, Asian Development Bank.
    • Handle: RePEc:ris:adbewp:0221
    as

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    References listed on IDEAS

    as
    1. Tolentino, V. Bruce J., 2002. "The Globalization of Food Security: Rice Policy Reforms in the Philippines," Philippine Journal of Development PJD 2002 Vol. XXIX No. 2-, Philippine Institute for Development Studies.
    2. 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.
    3. Jonah B. Gelbach & Lant H. Pritchett, 2000. "Indicator targeting in a political economy: Leakier can be better," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 4(2), pages 113-145.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    food subsidies; India; Philippines; poverty; public spending;
    All these keywords.

    JEL classification:

    • 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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