A regional general equilibrium analysis of the welfare impact of cash transfers
Resource information
Date of publication
Dezembro 2000
ISBN / Resource ID
72365
Pages
59 pages
Copyright details
IFPRI adheres to the basic tenets of the Budapest Open Access Initiative, articulated in 2002 (subject to any applicable third-party rights and or confidentiality obigations). All applicable data are subject to IFPRI’s Institutional Review Board (IRB) guidelines. Copyright © 2013 International Food Policy Research Institute (IFPRI). All rights reserved.
Using a regionally disaggregated computable general equilibrium model, we analyze the differential welfare impacts of a cash transfer program targeted at rural areas. The direct effect of the transfers decreases regional income differentials, but the indirect effects depend on how the program is financed. Financing the program with a more efficient tax system is also less regressive and has favorable urban impacts. The less efficient instruments result in relatively higher incomes in all rural regions, but are more regressive. The increasing share of urban poverty highlights the shortcomings of rural targeting and raises the issue of horizontal equity.