Targeted transfers in poor countries: revisiting the tradeoffs and policy options

No 3048, Policy Research Working Paper Series from The World Bank

Abstract: Two tradeoffs have been widely seen to severely constrain the scope for attacking poverty using redistributive transfers in poor countries: an equity-efficiency tradeoff and an insurance-efficiency tradeoff. The author provides a critical overview of recent theoretical and empirical work that has called into question the extent of these tradeoffs in poor countries. He argues that these aggregate tradeoffs are often exaggerated. Indeed, they may not even be binding constraints in practice, given market failures. There appears to be scope for using carefully designed transfer schemes as an effective tool against both transient and chronic poverty. However, the same factors that weaken the tradeoffs also suggest that efficient redistributive policies might look rather different to the programs often found in practice.

Keywords: Health Economics&Finance; Environmental Economics&Policies; Labor Policies; Services&Transfers to Poor; Poverty Impact Evaluation; Safety Nets and Transfers; Services&Transfers to Poor; Rural Poverty Reduction; Environmental Economics&Policies; Inequality (search for similar items in EconPapers)
Date: 2003-05-31
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Citations: View citations in EconPapers (17)

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Working Paper: Targeted transfers in poor countries: revisiting the trade-offs and policy options (2003)
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