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The potential benefits of reallocation of government subsidies in Bangladesh

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  • M. A. Jabbar
  • David Colman

Abstract

In this study subsidies are treated as both an element of government expenditure and a source of household income. The impacts of reallocating existing subsidy expenditure to selected alternatives are estimated upon factors such as growth, employment, personal saving indirect tax and import using a semi-closed input‐output model. The results indicate substantial scope for deriving additional benefits by reallocating the existing subsidies on foreign wage earnings and urban food ration (enjoyed by the richer classes) to fertilizer, foodgrain procurement or rural food rations (enjoyed by the poorer classes). Reallocation of fertilizer or rural food ration subsidies have no benefits. The benefits of reallocation to production activities are higher than for consumption activities.

Suggested Citation

  • M. A. Jabbar & David Colman, 1990. "The potential benefits of reallocation of government subsidies in Bangladesh," Journal of International Development, John Wiley & Sons, Ltd., vol. 2(3), pages 380-398, July.
    • Handle: RePEc:wly:jintdv:v:2:y:1990:i:3:p:380-398
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    File URL: http://hdl.handle.net/10.1002/jid.3380020306
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