Food Subsidies and Poverty Alleviation

Timothy Besley and Ravi Kanbur

Economic Journal, 1988, vol. 98, issue 392, 701-19

Abstract: This paper formulates the problem of the optimal pattern of food subsidies in a general setting, where the objective is to minimize a class of poverty indices within the framework of the mo dern public finance theory. Taking explicit account of the budget con straint and preferences and technologies, the authors derive rules fo r retargetting food subsidies to reduce poverty. Many operational rul es of thumb appear as special cases of the general results. The analy sis thus provides not only the microfoundations of these operational rules, but also their appropriate generalizations when the conditions under which they arise are not fulfilled. Copyright 1988 by Royal Economic Society.

Date: 1988
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