Publication: Targeted Transfers in Poor Countries : Revisiting Trade-Offs and Policy Options
Date
2003-01
ISSN
Published
2003-01
Author(s)
Whitehead, Tim
Abstract
Social 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.
Citation
“Whitehead, Tim. 2003. Targeted Transfers in Poor Countries : Revisiting Trade-Offs and Policy Options. Social Safety Nets Primer Notes; No. 13. © World Bank, Washington, DC. http://openknowledge.worldbank.org/entities/publication/3f73a90c-3d41-5966-beff-35390f1f69f5 License: CC BY 3.0 IGO.”