Ravallion, Martin2014-05-092014-05-092003-05https://hdl.handle.net/10986/18213Two tradeoffs have been widely seen to severely constrain the scope for attacking poverty using redistributive transfers in poor countries: an equity-efficiency tradeoff and an insurance-efficiency tradeoff. The author provides a critical overview of recent theoretical and empirical work that has called into question the extent of these tradeoffs in poor countries. He argues that these aggregate tradeoffs are often exaggerated. Indeed, they may not even be binding constraints in practice, given market failures. There appears to be scope for using carefully designed transfer schemes as an effective tool against both transient and chronic poverty. However, the same factors that weaken the tradeoffs also suggest that efficient redistributive policies might look rather different to the programs often found in practice.en-USCC BY 3.0 IGOTARGETED ASSISTANCETARGETED SUBSIDIESREDISTRIBUTIONTRADEOFFSEQUITY OBJECTIVESRISK MANAGEMENT ADMINISTRATIVE COSTSADVERSE EFFECTSADVERSE IMPACTAGGREGATE GROWTHAGGREGATE OUTPUTASSET DISTRIBUTIONASSET INEQUALITYASYMMETRIC INFORMATIONCASH TRANSFERSCHRONIC POVERTYCONSUMPTION GROWTHCOUNTRY-SPECIFIC EFFECTSCREDIT MARKETCREDIT MARKET FAILUREDATA SETDECISION MAKINGDEVELOPED COUNTRIESDEVELOPING COUNTRIESDIMINISHING RETURNSDROUGHTDYNAMIC PANELECONOMIC ACTIVITYECONOMIC GROWTHEGSEMPIRICAL EVIDENCEEMPIRICAL RESEARCHEMPIRICAL RESULTSEMPIRICAL STUDIESEMPIRICAL SUPPORTEMPIRICAL WORKEQUITABLE DISTRIBUTIONEXTERNALITIESFAMINEGROWTH PROCESSGROWTH PROSPECTSGROWTH RATEGROWTH RATESGROWTH REGRESSIONHOUSEHOLD CONSUMPTIONHOUSEHOLD DATAHOUSEHOLD INCOMEHUMAN CAPITALIDIOSYNCRATIC SHOCKSIMPACT OF INEQUALITYINCOMEINCOME GROUPSINCOME INEQUALITYINCOME RISKINCOME SHOCKSINCOME SUPPORTINCOME TRANSFERSINCOMESINDICATOR TARGETINGINEQUALITYINEQUALITY REDUCTIONINFLATIONINSURANCEINVESTMENT OPPORTUNITIESINVOLUNTARY UNEMPLOYMENTLABOR FORCELAND INEQUALITYLINK BETWEEN INEQUALITY AND GROWTHLOW INCOMEMARKET FAILURESMARKET IMPERFECTIONSMEAN INCOMEMEANS TESTINGMEANS TESTSMEASUREMENT ERRORSMEASUREMENT PROBLEMSNEGATIVE CORRELATIONNEGATIVE SHOCKNUTRITIONAL STATUSPOLICY CIRCLESPOLICY DESIGNPOLICY IMPLICATIONSPOLICY INTERVENTIONPOLICY INTERVENTIONSPOLICY MAKERSPOLICY OPTIONSPOLICY RESEARCHPOLITICAL ECONOMYPOLITICAL SUPPORTPOORPOOR AREASPOOR COUNTRIESPOOR GROWTHPOOR PEOPLEPOPULATION SHAREPOVERTY INDEXPOVERTY LEVELSPOVERTY REDUCTIONPOVERTY REDUCTION OBJECTIVEPOVERTY REDUCTION STRATEGYPRODUCTIVE ACTIVITYPRODUCTIVE OPPORTUNITIESPRODUCTIVITYPUBLIC SPENDINGRANDOM WALKREDISTRIBUTIVE POLICIESREDISTRIBUTIVE POLICYREDUCING INEQUALITYREDUCING POVERTYRISING INEQUALITYSAFETY NETSSAVINGSSOCIAL COSTSTARGETED TRANSFERSTARGETINGTARGETING MECHANISMSTAXATIONTHEORETICAL MODELSTRADEOFFSTRANSFER PROGRAMSUNEMPLOYMENTWAGESRISK MANAGEMENTADMINISTRATIVE COSTS10.1596/1813-9450-3048