Targeting the Poor - Developing Economies face Special Challenges in delivering Social Protection

Reducing poverty and improving equity
Posted Jan 10, 2019 | IMF, Rema Hanna, Adnan Khan, Benjamin Olken

For the 108 countries classified by the World Bank as "upper-middle" or "lower-middle" income – e.g. India, Morocco, and Peru - tax revenue now dwarfs development assistance. Developing economies are moving away from universal (or limited) in-kind subsidies and transfers to the poor, toward targeted cash transfers of various types. Although the focus of this IMF article by Rema Hanna, Adnan Khan, and Benjamin Olken is on anti-poverty programs, social insurance programs – e.g. pensions and unemployment benefits - remain an important component of redistributive systems, helping households minimise risk that could distort their behaviour. When poor countries initiate redistribution programmes, they face challenges different from those in high-income countries. Understanding these differences is critical to grasping how social protection has evolved over time, and how it may change in the future.


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