Is more targeting consistent with less spending?

Martin Ravallion

No 2079, Policy Research Working Paper Series from The World Bank

Abstract: 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.

Keywords: Poverty Reduction Strategies; Poverty Monitoring&Analysis; Public Sector Economics&Finance; Poverty Impact Evaluation; Services&Transfers to Poor; Rural Poverty Reduction; Services&Transfers to Poor; Poverty Reduction Strategies; Poverty Monitoring&Analysis; Safety Nets and Transfers (search for similar items in EconPapers)
Date: 1999-03-31
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Citations: View citations in EconPapers (17)

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