Is more targeting consistent with less spending?
Economists often advise governments to target their spending better when cuts are called for. The author asks whether that advice is consistent with a political economy constraint that limits the welfare losses to the nonpoor from spending cuts. A simple theoretical model shows that the answer is unclear on a priori grounds and so will depend on the specifics of program design and financing. A case study for a World Bank-supported social program in Argentina illustrates how cuts can come with worse targeting performance: The allocation to the poor falls faster than that to the nonpoor. The author draws some lessons for how the poor might be better protected from cuts.
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- Ravallion, Martin, 1999. "Are poorer states worse at targeting their poor?," Economics Letters, Elsevier, vol. 65(3), pages 373-377, December.
- Ravallion, Martin, 2000.
"Monitoring Targeting Performance When Decentralized Allocations to the Poor Are Unobserved,"
World Bank Economic Review,
World Bank Group, vol. 14(2), pages 331-345, May.
- Ravallion, 1999. "Monitoring targeting performance when decentralized allocation to the poor are unobserved," Policy Research Working Paper Series 2080, The World Bank.
- Lanjouw, Peter & Ravallion, Martin, 1998. "Benefit incidence and the timing of program capture," Policy Research Working Paper Series 1956, The World Bank.
- De Donder, Philippe & Hindriks, Jean, 1998. "The Political Economy of Targeting," Public Choice, Springer, vol. 95(1-2), pages 177-200, April.