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Evaluating the Impact of Government Programs on Social Welfare: The Role of Targeting and the Allocation Rules Among Program Beneficiaries

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  • Quentin Wodon

    (World Bank)

  • Shlomo Yitzhaki

    (Hebrew University)

Abstract

A framework is provided for assessing the impact of social programs on welfare using two summary statistics: the mean benefit of the program and a distributional term (the Gini income elasticity of the program). The distributional term is itself decomposed into two components. The first component measures the targeting performance of the program, that is, who is participating and who is not. The second component measures the impact of the allocation rules for the distribution of the benefits among program participants. To help compare different programs, lower and upper bounds are provided for the two components of the distributional terms. Sensitivity analysis with respect to alternative formulations of the social welfare function is performed by using the (extended) Gini income elasticity. The framework is applied to data for three Latin American countries.

Suggested Citation

  • Quentin Wodon & Shlomo Yitzhaki, 2002. "Evaluating the Impact of Government Programs on Social Welfare: The Role of Targeting and the Allocation Rules Among Program Beneficiaries," Public Finance Review, , vol. 30(2), pages 102-123, March.
    • Handle: RePEc:sae:pubfin:v:30:y:2002:i:2:p:102-123
    DOI: 10.1177/109114210203000202
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    References listed on IDEAS

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    7. Yitzhaki, Shlomo, 1991. "Calculating Jackknife Variance Estimators for Parameters of the Gini Method," Journal of Business & Economic Statistics, American Statistical Association, vol. 9(2), pages 235-239, April.
    8. Yitzhaki, Shlomo, 1983. "On an Extension of the Gini Inequality Index," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 24(3), pages 617-628, October.
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    10. Louise Cord & Quentin Wodon, 2001. "Do Agricultural Programs in Mexico Alleviate Poverty? Evidence from the Ejido Sector," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 38(114), pages 239-256.
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    Citations

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    Cited by:

    1. Francesca Gastaldi & Paolo Liberati & Elena Pisano & Simone Tedeschi, 2014. "Progressivity-Improving VAT Reforms in Italy," Working papers 6, Società Italiana di Economia Pubblica.
    2. Clert, Carine & Wodon, Quentin, 2002. "The Targeting of Government Programs in Chile: A Quantitative and Qualitative Assessment," MPRA Paper 15414, University Library of Munich, Germany.
    3. Morris, Saul S. & Wodon, Quentin, 2003. "The Allocation of Natural Disaster Relief Funds: Hurricane Mitch in Honduras," World Development, Elsevier, vol. 31(7), pages 1279-1289, July.
    4. Wodon, Quentin & Yitzhaki, Shlomo, 2002. "Inégalité et bien-être social [Inequality and Social Welfare]," MPRA Paper 10488, University Library of Munich, Germany.
    5. Francesca Gastaldi & Paolo Liberati & Elena Pisano & Simone Tedeschi, 2017. "Regressivity-Reducing VAT Reforms," International Journal of Microsimulation, International Microsimulation Association, vol. 10(1), pages 39-72.
    6. Paul Makdissi & Quentin Wodon, 2012. "Gini Decomposition And Gini Income Elasticity Under Income Variability," Bulletin of Economic Research, Wiley Blackwell, vol. 64(2), pages 184-191, April.
    7. Wodon, Quentin & Yitzhaki, Shlomo, 2002. "Inequality and Social Welfare," MPRA Paper 12298, University Library of Munich, Germany.
    8. repec:ijm:journl:v109:y:2017:i:1:p:39-72 is not listed on IDEAS
    9. Ajwad, Mohamed Ishan & Wodon, Quentin, 2002. "Who Benefits from Increased Access to Public Services at the Local Level? A Marginal Benefit Incidence Analysis for Education and Basic Infrastructure," MPRA Paper 12309, University Library of Munich, Germany.
    10. Bérangère Legendre, 2014. "Fiscalité des retraités, redistribution et équité," Post-Print hal-01284030, HAL.
    11. repec:ebl:ecbull:v:9:y:2007:i:4:p:1-7 is not listed on IDEAS
    12. Duclos, Jean-Yves & Makdissi, Paul & Wodon, Quentin, 2003. "Poverty-Efficient Transfer Programs: The Role of Targeting and Allocation Rules," Cahiers de recherche 0305, CIRPEE.
    13. Wodon, Quentin & Yitzhaki, Shlomo, 2002. "Неравенство И Общественное Благосостояние [Inequality and Social Welfare]," MPRA Paper 10489, University Library of Munich, Germany.
    14. Wodon, Quentin & Yitzhaki, Shlomo, 2002. "Desigualdad y bienestar social [Inequality and Social Welfare]," MPRA Paper 10487, University Library of Munich, Germany.
    15. Duclos, Jean-Yves & Makdissi, Paul & Wodon, Quentin, 2005. "Poverty-dominant program reforms: the role of targeting and allocation rules," Journal of Development Economics, Elsevier, vol. 77(1), pages 53-73, June.
    16. Diego Angel-Urdinola & Quentin Wodon, 2007. "Do Utility Subsidies Reach the Poor? Framework and Evidence for Cape Verde, Sao Tome, and Rwanda," Economics Bulletin, AccessEcon, vol. 9(4), pages 1-7.
    17. Dorothée Charlier & Bérangère Legendre & Anna Risch, 2019. "Fuel poverty in residential housing: Providing financial support vs. combatting substandard housing," Post-Print hal-02145950, HAL.
    18. David Stifel & Harold Alderman, 2005. "Targeting at the Margin: the 'Glass of Milk' Subsidy Programme in Peru," Journal of Development Studies, Taylor & Francis Journals, vol. 41(5), pages 839-864.

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