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PublicationTargeted Transfers in Poor Countries : Revisiting Trade-Offs and Policy Options(World Bank, Washington, DC, 2003-01) Whitehead, TimSocial safety nets are often seen as short-term palliatives or, worse, wastes of scarce money in developing economies. Critics point to leakages of benefits to non-targeted groups (i.e., the non-poor) or the policies' potential adverse effects on the incentives to work or save. Even supporters of social safety nets often view their benefits solely in terms of equity. These policies are rarely seen as an integral part of a strategy for fostering economic growth and poverty reduction. Indeed, many observers have argued that there are significant trade-offs between spending public money on such programs and long-term poverty reduction. Theory and evidence suggest that there may be scope for policies to alleviate current poverty and uninsured risk, and at the same time, to enhance economic efficiency. There have been a number of successful transfer schemes. However, in drawing implications for future policies, targeted transfers may not dominate other options such as fostering new institutions for credit provision, better enforcement of property rights, and supply-side interventions in schooling and healthcare. Theory and evidence suggest that the trade-offs between traditional safety net goals and efficiency have probably been exaggerated. A new approach to social safety nets would recognize their potential to enhance growth and emphasize careful design and evaluation to ensure that that potential is realized. PublicationTargeting Methods for Transfers(World Bank, Washington, DC, 2003-01) Grosh, Margaret; Hoddinott, JohnOf the commonly used methods for directing transfers to the poor, there is little consensus about which is best. Policymakers need to know how effective different targeting mechanisms are, how the effectiveness differs by method and type of program, and the implications. Targeting success can be partially captured by one outcome indicator, the share of benefits going to the bottom 40 per cent of the population. For example, if a program delivers 60 per cent of its benefits to this group, the outcome indicator is (60 divided by 40 =) 1.5. The higher the indicator - i.e., the greater the percentage of benefits going to the poor relative to their population share - the more progressive is the targeting. The authors calculate their indicator for 85 of the programs in the database. The full study provides information on the use of targeting techniques, summary statistics on comparative program performance, and regression analysis to examine the correlations between methods and outcomes. The study drew broad conclusions, subject to the limitations described beforehand, suggesting that "Targeting can work, but it doesn't always. There is no clearly preferred method for all types of programs, or all country contexts. A weak ranking of outcomes achieved by different mechanisms was possible. And, implementation matters tremendously to outcomes". Targeting performance improved with country income levels, the extent to which governments are held accountable for their actions, and the degree of inequality.