This paper revisits the role of targeted transfers in poor countries in the light of the new theories on the social costs of uninsured risks and unmitigated inequalities. Recognizing that the policy implications depend crucially on whether there is good empirical evidence to support the theoretical arguments, the bulk of the first half of the paper discusses the evidence. The paper then takes up a key question for policy: Can the potential for efficient redistribution be realized in practice using targeted transfers, given the constraints faced in poor countries?
Targeted transfers in poor countries: revisiting the trade-offs and policy options, presented at Staying Poor: Chronic Poverty and Development Policy, Institute for Development Policy and Management, University of Manchester, 7-9 April 2003. Chronic Poverty Research Centre (CPRC), Manchester, UK, 36 pp.