Publication: Macro Crises and Targeting Transfers to the Poor
Date
2010
ISSN
Published
2010
Author(s)
Kanbur, Ravi
Abstract
A central question for policy makers
concerned with helping 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 reallocation 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
consideration 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.
Citation
“Kanbur, Ravi. 2010. Macro Crises and Targeting Transfers to the Poor. Commission on Growth and Development Working Paper;No. 66. © World Bank, Washington, DC. http://hdl.handle.net/10986/27786 License: CC BY 3.0 IGO.”