IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/2391.html
   My bibliography  Save this paper

Are the poor protected from budget cuts? theory and evidence for Argentina

Author

Listed:
  • Ravallion,Martin

Abstract

Adjustment programs often emphasize protecting social spending - especially pro-poor spending - from cuts. Yet the incidence of fiscal contraction - and hence the case for action to protect public spending on the poor at a time of overall fiscal austerity - is an empirical question, which the author addresses using data from Argentina. Aggregate budget cuts in Argentina in the 1980s and 1990s, typically brought proportionately greater cuts in social spending."Non-social"spending was protected. But proportionate cuts for types of social spending that matter more to the poor, were about the same as the cuts for those that tend to favor the non-poor. Absolute cuts were in fact greater for"social insurance"that matters more to the non-poor. But spending on targeted social assistance, and employment programs, was more vulnerable to aggregate spending cuts, than were more universal social services. Social spending was clearly exposed to fiscalcontraction, but this was somewhat less true of pro-poor spending on things that also benefited the non-poor. So fine targeting may be a mixed blessing for the poor, bringing greater vulnerability to cuts, possibly when help is most needed. There is a strong case for action to protect pro-poor social spending at such times. An externally financed work-fare scheme in Argentina was far better targeted than other social spending, but still had to ensure that a small, but relatively well-protected share of the benefits went to the non-poor. The program was clearly subject to the same political economy constraints that influenced the incidence of past fiscal contractions in Argentina. The program expanded into poor areas when the budget increased, but retreated from poor areas when the program was cut. It was the program's disbursements to non-poor areas that were protected. Still, given the low wage rate offered, the direct benefits from the program were still likely to have favored the poor, even after the cuts.

Suggested Citation

  • Ravallion,Martin, 2000. "Are the poor protected from budget cuts? theory and evidence for Argentina," Policy Research Working Paper Series 2391, The World Bank.
    • Handle: RePEc:wbk:wbrwps:2391
    as

    Download full text from publisher

    File URL: http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2015/09/14/090224b082b05b7d/1_0/Rendered/PDF/Are0the0poor0p0idence0for0Argentina.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. van de Walle, Dominique, 1998. "Targeting Revisited," The World Bank Research Observer, World Bank, vol. 13(2), pages 231-248, August.
    2. Philippe De Donder & Jean Hindriks, 1998. "The political economy of targeting," Public Choice, Springer, vol. 95(1), pages 177-200, April.
    3. Martin Ravallion, 1999. "Is More Targeting Consistent with Less Spending?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 6(3), pages 411-419, August.
    4. Ravallion, Martin, 1999. "Appraising Workfare," The World Bank Research Observer, World Bank, vol. 14(1), pages 31-48, February.
    5. Ravallion, Martin, 2000. "Monitoring Targeting Performance When Decentralized Allocations to the Poor Are Unobserved," The World Bank Economic Review, World Bank, vol. 14(2), pages 331-345, May.
    6. Lanjouw, Peter & Ravallion, Martin, 1998. "Benefit incidence and the timing of program capture," Policy Research Working Paper Series 1956, The World Bank.
    7. Brown, David S. & Hunter, Wendy, 1999. "Democracy and Social Spending in Latin America, 1980–92," American Political Science Review, Cambridge University Press, vol. 93(4), pages 779-790, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Pierre‐Richard Agénor, 2004. "Macroeconomic Adjustment and the Poor: Analytical Issues and Cross‐Country Evidence," Journal of Economic Surveys, Wiley Blackwell, vol. 18(3), pages 351-408, July.
    2. Ravallion, Martin, 2002. "Are the Poor Protected from Budget Cuts? Evidence for Argentina," Journal of Applied Economics, Universidad del CEMA, vol. 5(1), pages 1-27, May.
    3. Maloney, William F., 2001. "Evaluating emergency programs," Policy Research Working Paper Series 2728, The World Bank.
    4. Fabianna Bacil & Beatriz Burattini & João Pedro Lang & Camila Rolon & Merindah Loessl, 2022. "Las transferencias en efectivo con enfoque universal en América Latina y el Caribe," Research Report Spanish (Country Study) 65, International Policy Centre for Inclusive Growth.
    5. -, 2004. "A decade of social development in Latin America, 1990-1999," Libros de la CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 2383 edited by Eclac.
    6. International Monetary Fund, 2002. "Financial Crises, Poverty, and Income Distribution," IMF Working Papers 2002/004, International Monetary Fund.
    7. World Bank, 2003. "Argentina - Crisis and Poverty 2003 : A Poverty Assessment, Volume 2. Background Papers," World Bank Publications - Reports 14701, The World Bank Group.
    8. World Bank, 2005. "Household Risk Management and Social Protection in Chile," World Bank Publications - Books, The World Bank Group, number 14839, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ravallion, Martin, 2002. "Are the Poor Protected from Budget Cuts? Evidence for Argentina," Journal of Applied Economics, Universidad del CEMA, vol. 5(1), pages 1-27, May.
    2. Martin Ravallion, 1999. "Is More Targeting Consistent with Less Spending?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 6(3), pages 411-419, August.
    3. Ravallion, Martin, 2019. "Guaranteed employment or guaranteed income?," World Development, Elsevier, vol. 115(C), pages 209-221.
    4. Brown, Caitlin & Ravallion, Martin & van de Walle, Dominique, 2018. "A poor means test? Econometric targeting in Africa," Journal of Development Economics, Elsevier, vol. 134(C), pages 109-124.
    5. Arne Bigsten & Jörgen Levin, 2001. "Growth, Income Distribution, and Poverty," WIDER Working Paper Series DP2001-129, World Institute for Development Economic Research (UNU-WIDER).
    6. Ferreira, Francisco & Prennushi, Giovanna & Ravallion, Martin, 1999. "Protecting the poor from macroeconomic shocks," Policy Research Working Paper Series 2160, The World Bank.
    7. Chris Elbers & Peter Lanjouw & Johan A. Mistiaen & Berk Özler & Kenneth Simler, 2003. "Are Neighbours Equal? Estimating Local Inequality in Three Developing Countries," WIDER Working Paper Series DP2003-52, World Institute for Development Economic Research (UNU-WIDER).
    8. Ravallion, Martin, 2003. "Targeted transfers in poor countries : revisiting the tradeoffs and policy options," Policy Research Working Paper Series 3048, The World Bank.
    9. Jalan, Jyotsna & Ravallion, Martin, 2003. "Estimating the Benefit Incidence of an Antipoverty Program by Propensity-Score Matching," Journal of Business & Economic Statistics, American Statistical Association, vol. 21(1), pages 19-30, January.
    10. Ravallion, Martin, 1999. "Are poorer states worse at targeting their poor?," Economics Letters, Elsevier, vol. 65(3), pages 373-377, December.
    11. Chikako Yamauchi, 2010. "Community-Based Targeting and Initial Local Conditions: Evidence from Indonesia's IDT Program," Economic Development and Cultural Change, University of Chicago Press, vol. 59(1), pages 95-147, October.
    12. Elbers, Chris & Lanjouw, Peter & Mistiaen, Johan & Özler, Berk & Simler, Kenneth, 2003. "Are neighbors equal?," FCND discussion papers 147, International Food Policy Research Institute (IFPRI).
      • Elbers, Chris & Lanjouw, Peter & Mistiaen, Johan & Özler, Berk & Simler, Kenneth, 2003. "Are neighbors equal?," FCND briefs 147, International Food Policy Research Institute (IFPRI).
    13. Galasso, Emanuela & Ravallion, Martin, 2000. "Distributional outcomes of a decentralized welfare program," Policy Research Working Paper Series 2316, The World Bank.
    14. Schüring, Esther & Gassmann, Franziska, 2012. "Whom to target: an obvious choice?," MERIT Working Papers 2012-028, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    15. Galasso, Emanuela & Ravallion, Martin, 2005. "Decentralized targeting of an antipoverty program," Journal of Public Economics, Elsevier, vol. 89(4), pages 705-727, April.
    16. Almeida, Rita K. & Galasso, Emanuela, 2010. "Jump-starting Self-employment? Evidence for Welfare Participants in Argentina," World Development, Elsevier, vol. 38(5), pages 742-755, May.
    17. Martin Ravallion, 2004. "Who is protected from budget cuts?," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 7(2), pages 109-122.
    18. Kosack, Stephen, 2003. "Effective Aid: How Democracy Allows Development Aid to Improve the Quality of Life," World Development, Elsevier, vol. 31(1), pages 1-22, January.
    19. Emanuela Galasso & Martin Ravallion, 2004. "Social Protection in a Crisis: Argentina's Plan Jefes y Jefas," The World Bank Economic Review, World Bank, vol. 18(3), pages 367-399.
    20. Conning, Jonathan & Kevane, Michael, 2001. "Community based targeting mechanisms for social safety nets," Social Protection Discussion Papers and Notes 23146, The World Bank.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:2391. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Roula I. Yazigi (email available below). General contact details of provider: https://edirc.repec.org/data/dvewbus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.