Macro Crises and Targeting Transfers to the Poor

Ravi Kanbur

Journal of Globalization and Development, 2010, vol. 1, issue 1, 16

Abstract: 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.

Keywords: macro crises; transfer programs; poverty (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://doi.org/10.2202/1948-1837.1005 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:globdv:v:1:y:2010:i:1:n:9

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/jgd/html

DOI: 10.2202/1948-1837.1005

Access Statistics for this article

Journal of Globalization and Development is currently edited by Joseph E. Stiglitz, Kevin Gallagher, Jeronim Capaldo, Arjun Jayadev, José Antonio Ocampo and Dani Rodrik

More articles in Journal of Globalization and Development from De Gruyter
Bibliographic data for series maintained by Peter Golla ().