IDEAS home Printed from
MyIDEAS: Login to save this paper or follow this series

Targeted transfers in poor countries : revisiting the trade-offs and policy options

  • Martin Ravallion

The conventional wisdom in mainstream development policy circles is that income transfers to the poor, and safety net policies more generally, are at best a short-term palliative and at worst a waste of money. They are not seen as a core element of an effective long-term poverty reduction strategy. These views are starting to be questioned. Firstly, evidence from careful evaluations has pointed to a number of success stories. Secondly, the presumption of an overall trade-off between redistribution or insurance and growth has come to be questioned. This paper revisits the role of targeted transfers in poor countries in light of the new theories on the social costs of uninsured risks and unmitigated inequalities.This body of theory and evidence offers a new perspective on social protection policies in poor countries, suggesting that there is scope for using these policies to compensate for the market failures that help perpetuate poverty, particularly in high-inequality settings. While acknowledging caveats to policy implementation, the paper suggests that it is time for a pragmatic and open-minded approach to this class of interventions, recognizing the potentially important role they can play, but using careful design and evaluation to assure that the potential is realized.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Paper provided by The World Bank in its series Social Protection Discussion Papers with number 27869.

in new window

Date of creation: 01 May 2003
Date of revision:
Handle: RePEc:wbk:hdnspu:27869
Contact details of provider: Postal: 1818 H Street, N.W., Washington, DC 20433
Phone: (202) 477-1234
Web page:

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Alderman,Harold & Hoddinott, John & Kinsey, Bill, 2003. "Long-term consequences of early childhood malnutrition," FCND briefs 168, International Food Policy Research Institute (IFPRI).
  2. Conning, Jonathan & Kevane, Michael, 2001. "Community based targeting mechanisms for social safety nets," Social Protection Discussion Papers 23146, The World Bank.
  3. Karla Hoff & Andrew B. Lyon, 1994. "Non-Leaky Buckets: Optimal Redistributive Taxation and Agency Costs," NBER Working Papers 4652, National Bureau of Economic Research, Inc.
  4. Galasso, Emanuela & Ravallion, Martin, 2005. "Decentralized targeting of an antipoverty program," Journal of Public Economics, Elsevier, vol. 89(4), pages 705-727, April.
  5. Abhijit Banerjee & Andrew F. Newman, 1989. "Risk-Bearing and the Theory of Income Distribution," Discussion Papers 877, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  6. Ravallion, Martin & Wodon, Quentin, 2000. "Does Child Labour Displace Schooling? Evidence on Behavioural Responses to an Enrollment Subsidy," Economic Journal, Royal Economic Society, vol. 110(462), pages C158-75, March.
  7. Lipton, Michael & Ravallion, Martin, 1993. "Poverty and policy," Policy Research Working Paper Series 1130, The World Bank.
  8. Li, Hongyi & Zou, Heng-fu, 1998. "Income Inequality Is Not Harmful for Growth: Theory and Evidence," Review of Development Economics, Wiley Blackwell, vol. 2(3), pages 318-34, October.
  9. Schady, Norbert R., 2002. "The (positive) effect of macroeconomic crises on the schoolingand employment decisions of children in a middle-income country," Policy Research Working Paper Series 2762, The World Bank.
  10. Deininger, Klaus & Squire, Lyn, 1998. "New ways of looking at old issues: inequality and growth," Journal of Development Economics, Elsevier, vol. 57(2), pages 259-287.
  11. Hoff, Karla, 2008. "Joseph E. Stiglitz," Policy Research Working Paper Series 4478, The World Bank.
  12. Spagnolo, Giancarlo, 1999. "Social relations and cooperation in organizations," Journal of Economic Behavior & Organization, Elsevier, vol. 38(1), pages 1-25, January.
  13. Oded Galor & Joseph Zeira, 2013. "Income Distribution and Macroeconomics," Working Papers 2013-12, Brown University, Department of Economics.
  14. Hongyi Li & Lyn Squire & Heng-fu Zou, 1998. "Explaining International and Intertemporal Variations in Income Inequality," CEMA Working Papers 73, China Economics and Management Academy, Central University of Finance and Economics.
  15. Ravallion, Martin & Datt, Gaurav & Chaudhuri, Shubham, 1993. "Does Maharashtra's Employment Guarantee Scheme Guarantee Employment? Effects of the 1988 Wage Increase," Economic Development and Cultural Change, University of Chicago Press, vol. 41(2), pages 251-75, January.
  16. De Donder, Philippe & Hindriks, Jean, 1998. " The Political Economy of Targeting," Public Choice, Springer, vol. 95(1-2), pages 177-200, April.
  17. van de Walle, Dominique, 1998. "Targeting Revisited," World Bank Research Observer, World Bank Group, vol. 13(2), pages 231-48, August.
  18. 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.
  19. Jalan, Jyotsna & Ravallion, Martin, 1998. "Transient Poverty in Postreform Rural China," Journal of Comparative Economics, Elsevier, vol. 26(2), pages 338-357, June.
  20. Clarke, George R. G., 1992. "More evidence on income distribution and growth," Policy Research Working Paper Series 1064, The World Bank.
  21. Ravallion, Martin & Sen, Binayak, 1994. "Impacts on rural poverty of land-based targeting: Further results for Bangladesh," World Development, Elsevier, vol. 22(6), pages 823-838, June.
  22. Holzmann, Robert & Jorgensen, Steen, 1999. "Social protection as social risk management : conceptual underpinnings for the social protection sector strategy paper," Social Protection Discussion Papers 20119, The World Bank.
  23. Jacoby, Hanan G & Skoufias, Emmanuel, 1997. "Risk, Financial Markets, and Human Capital in a Developing Country," Review of Economic Studies, Wiley Blackwell, vol. 64(3), pages 311-35, July.
  24. Datt, Gaurav & Ravallion, Martin, 1994. "Transfer Benefits from Public-Works Employment: Evidence for Rural India," Economic Journal, Royal Economic Society, vol. 104(427), pages 1346-69, November.
  25. Cecilia Garcia-Penalosa & Eve Caroli & Philippe Aghion, 1999. "Inequality and Economic Growth: The Perspective of the New Growth Theories," Journal of Economic Literature, American Economic Association, vol. 37(4), pages 1615-1660, December.
  26. Glewwe, Paul & Jacoby, Hanan G. & King, Elizabeth M., 2001. "Early childhood nutrition and academic achievement: a longitudinal analysis," Journal of Public Economics, Elsevier, vol. 81(3), pages 345-368, September.
  27. van de Walle, Dominique & Gunewardena, Dileni, 2001. "Sources of ethnic inequality in Viet Nam," Journal of Development Economics, Elsevier, vol. 65(1), pages 177-207, June.
  28. Behrman, Jere R & Sengupta, Piyali & Todd, Petra, 2005. "Progressing through PROGRESA: An Impact Assessment of a School Subsidy Experiment in Rural Mexico," Economic Development and Cultural Change, University of Chicago Press, vol. 54(1), pages 237-75, October.
  29. Fafchamps, Marcel & Udry, Christopher & Czukas, Katherine, 1998. "Drought and saving in West Africa: are livestock a buffer stock?," Journal of Development Economics, Elsevier, vol. 55(2), pages 273-305, April.
  30. Robert Holzmann, 1990. "The Welfare Effects of Public Expenditure Programs Reconsidered," IMF Staff Papers, Palgrave Macmillan, vol. 37(2), pages 338-359, June.
  31. Kristin J. Forbes, 2000. "A Reassessment of the Relationship between Inequality and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 869-887, September.
  32. Robin Boadway & Michael Keen, 1999. "Redistribution," Working Papers 983, Queen's University, Department of Economics.
  33. Glewwe, Paul & Jocoby, Hanan & King, Elizabeth M., 1999. "Early childhood nutrition and academic achievement," FCND discussion papers 68, International Food Policy Research Institute (IFPRI).
  34. Deininger, Klaus & Olinto, Pedro, 2000. "Asset distribution, inequality, and growth," Policy Research Working Paper Series 2375, The World Bank.
  35. Alderman, Harold, 1987. "Allocation of goods through non-price mechanisms : Evidence on distribution by willingness to wait," Journal of Development Economics, Elsevier, vol. 25(1), pages 105-124, February.
  36. Binswanger, Hans P. & Deininger, Klaus & Feder, Gershon, 1993. "Power, distortions, revolt, and reform in agricultural land relations," Policy Research Working Paper Series 1164, The World Bank.
  37. Alderman, Harold, 1996. "Saving and economic shocks in rural Pakistan," Journal of Development Economics, Elsevier, vol. 51(2), pages 343-365, December.
  38. David Coady & Margaret Grosh & John Hoddinott, 2004. "Targeting of Transfers in Developing Countries : Review of Lessons and Experience," World Bank Publications, The World Bank, number 14902, March.
  39. Bhargava, Alok & Ravallion, Martin, 1993. "Does Household Consumption Behave as a Martingale? A Test for Rural South India," The Review of Economics and Statistics, MIT Press, vol. 75(3), pages 500-504, August.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:wbk:hdnspu:27869. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Raiden C. Dillard)

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.