Macro Crises and Targeting Transfers to the Poor
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Ravi Kanbur
A central question for policy makers concerned to help the poor through a macro crisis is how to target scarcer resources at a time of greater need. Technical arguments suggest that finer targeting, through tightening individual programs or reallocating resources towards more tightly targeted programs, uses resources more efficiently for poverty reduction. These arguments survive even when the greater informational costs and the incentive effects of finer targeting are taken into account. But political economy arguments suggest that finer targeting will end up with fewer resources allocated to that program, and that looser targeting, because it knits together the interests of the poor and the near-poor, may generate greater resources and hence be more effective for poverty reduction despite being "leakier." Overall, the policy advice to tighten targeting and to avoid more loosely targeted programs during crises needs to be given with considerable caution. However, the advice to design transfer systems with greater flexibility, in the technical and the political economy senses, is strengthened by the arguments presented here. The case for external assistance, to design flexible transfer systems ex ante, and to relieve the painful tradeoffs in targeting during a crisis, is also shown to be strong.
©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
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Artikel in diesem Heft
- Research Foundation
- Democracy, Autocracy and Bureaucracy
- Incomes in South Africa after the Fall of Apartheid
- Poverty and Disequalization
- Dysfunctional Finance: Positive Shocks and Negative Outcomes
- Policy Analysis
- Impact of Political Reservations in West Bengal Local Governments on Anti-Poverty Targeting
- Rethinking Global Economic and Social Governance
- Public Finance and Economic Development: Reflections based on Experience in China
- International Rules for Trade in Natural Resources
- Macro Crises and Targeting Transfers to the Poor
- Symposium
- Symposium: The Return of Counter-cyclical Policy - Editorial Preface
- Asia: Counter-Cyclical Policies: Indian Experience and Some General Observations
- Asia: China's Policy Responses to the Global Financial Crisis
- Latin America: Counter-Cyclical Policy in Brazil: 2008-09
- Latin America: The Structural Fiscal Balance Policy in Chile: A Move Toward Counter-Cyclical Macroeconomics
- Latin America: Comments on Financial Regulation and International Capital Flows in Latin America
- Africa: Africa's Counter-Cyclical Policy Responses to the Crisis
- Europe: How Deep Is a Crisis? Policy Responses and Structural Factors Behind Diverging Performances
- Europe: Counter-Cyclical Policies in Light of the Global Financial Crisis: The Case of Turkey
