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

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  • Martin Ravallion

Abstract

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.

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  • Martin Ravallion, 2003. "Targeted transfers in poor countries : revisiting the trade-offs and policy options," Social Protection and Labor Policy and Technical Notes 27869, The World Bank.
  • Handle: RePEc:wbk:hdnspu:27869
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    Cited by:

    1. Stefan Dercon (QEH), "undated". "Vulnerability: a micro perspective," QEH Working Papers qehwps149, Queen Elizabeth House, University of Oxford.
    2. Adrian Wood, 2004. "Making globalization work for the poor: the 2000 White Paper reconsidered," Journal of International Development, John Wiley & Sons, Ltd., pages 933-937.
    3. Stefan Dercon (QEH), "undated". "Risk, Growth and Poverty: what do we know, what do we need to know?," QEH Working Papers qehwps148, Queen Elizabeth House, University of Oxford.
    4. Narayanan, Sudha & Das, Upasak & Liu, Yanyan & Barrett, Christopher B., 2017. "The “Discouraged Worker Effect†in public works programs: Evidence from the MGNREGA in India," IFPRI discussion papers 1633, International Food Policy Research Institute (IFPRI).
    5. Milan Vodopivec, 2004. "Unemployment Insurance: Efficiency Effects and Lessons for Developing Countries," World Bank Other Operational Studies 11809, The World Bank.
    6. Sudha Narayanan, 2016. "Social Safety Nets for Food and Nutritional Security in India," Working Papers id:8758, eSocialSciences.
    7. Álvarez, Carola & Devoto, Florencia & Winters, Paul, 2008. "Why do Beneficiaries Leave the Safety Net in Mexico? A Study of the Effects of Conditionality on Dropouts," World Development, Elsevier, vol. 36(4), pages 641-658, April.
    8. Haagh, Louise, 2011. "Working Life, Well-Being and Welfare Reform: Motivation and Institutions Revisited," World Development, Elsevier, vol. 39(3), pages 450-473, March.
    9. Sudha Narayanan & Nicolas Gerber, 2015. "Social safety nets for food and nutritional security in India," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2015-031, Indira Gandhi Institute of Development Research, Mumbai, India.
    10. Brown, Lynn & Gentilini, Ugo, 2006. "On the Edge: The Role of Food-based Safety Nets in Helping Vulnerable Households Manage Food Insecurity," WIDER Working Paper Series 111, World Institute for Development Economic Research (UNU-WIDER).
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    17. Jules-Daniel Wurlod & Derek Eaton, 2015. "Chasing After the Frontier in Agricultural Productivity," CIES Research Paper series 37-2015, Centre for International Environmental Studies, The Graduate Institute.
    18. Richard Heeks & Shoba Arun, 2010. "Social outsourcing as a development tool: The impact of outsourcing IT services to women's social enterprises in Kerala," Journal of International Development, John Wiley & Sons, Ltd., pages 441-454.
    19. Guy Standing, 2007. "How Cash Transfers Boost Work and Economic Security," Working Papers 58, United Nations, Department of Economics and Social Affairs.
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