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Cash transfer as a social policy instrument or a tool of adjustment policy: from indirect subsidies (to energy and utilities) to cash subsidies in Iran, 2010-2014

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  • Meskoub, M.

Abstract

Cash transfers (CT) whether as income support to the elderly, poor households or other vulnerable groups have been hailed as one of the most innovative and effective social policy initiatives in the developing world. Available evidence suggest that their success would depend on their financial sustainability, low inflation and maintenance of a broad social policy support in areas such as food, health, education and housing. It is against this international experience and evidence that this paper sets out to evaluate the Iranian CT programme that was introduced by Ahmadi-Nejad as part of a major liberalization of energy prices in 2010 in order to bring domestic prices of energy and public utilities (water and electricity) in line with international prices. The Iranian CT programme became one of the largest of its kind in the world, with 90 per cent of population covered and costing 12 per cent of the GDP in 2010. This paper discusses the main characteristics of the Iranian programme and evaluates its impacts on household income, inflation, poverty alleviation and related welfare issues in areas such as health and nutrition. Comparison will be made with some of the major CT programmes around the world (e.g. Mexico and Brazil) to explore lessons that can be learned from such international experiences to reform the Iranian programme towards a targeted approach. It is in this context that the paper will ask whether CT programmes are complementary to or a substitute for broader social policy measures in developing countries.

Suggested Citation

  • Meskoub, M., 2015. "Cash transfer as a social policy instrument or a tool of adjustment policy: from indirect subsidies (to energy and utilities) to cash subsidies in Iran, 2010-2014," ISS Working Papers - General Series 610, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    • Handle: RePEc:ems:euriss:78631
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    References listed on IDEAS

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    1. David Coady & Margaret Grosh & John Hoddinott, 2004. "Targeting of Transfers in Developing Countries : Review of Lessons and Experience," World Bank Publications - Books, The World Bank Group, number 14902.
    2. Coady, David & Harris, Rebecca Lee, 2004. "Evaluating targeted cash transfer programs: a general equilibrium framework with an application to Mexico," Research reports 137, International Food Policy Research Institute (IFPRI).
    3. Ghazi Tabatabaei, S.M. & Mehri , N. & Messkoub, M., 2013. "What is unpaid female labour worth? Evidence from the Time Use Studies of Iran in 2008 and 2009," ISS Working Papers - General Series 562, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    4. de Brauw, Alan & Gilligan, Daniel O. & Hoddinott, John & Roy, Shalini, 2015. "The Impact of Bolsa Família on Schooling," World Development, Elsevier, vol. 70(C), pages 303-316.
    5. Edgar F.A. Cooke & Sarah Hague & Luca Tiberti & John Cockburn & Abdel-Rahmen El Lahga, 2016. "Estimating the impact on poverty of Ghana’s fuel subsidy reform and a mitigating response," Journal of Development Effectiveness, Taylor & Francis Journals, vol. 8(1), pages 105-128, March.
    6. Adato, Michelle, 2008. "Integrating survey and ethnographic methods to evaluate conditional cash transfer programs:," IFPRI discussion papers 810, International Food Policy Research Institute (IFPRI).
    7. Ariel Fiszbein & Norbert Schady & Francisco H.G. Ferreira & Margaret Grosh & Niall Keleher & Pedro Olinto & Emmanuel Skoufias, 2009. "Conditional Cash Transfers : Reducing Present and Future Poverty," World Bank Publications - Books, The World Bank Group, number 2597.
    8. Johan Sandberg, 2012. "Conditional Cash Transfers and Social Mobility: The Role of Asymmetric Structures and Segmentation Processes," Development and Change, International Institute of Social Studies, vol. 43(6), pages 1337-1359, November.
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    Cited by:

    1. Fischer, A.M., 2017. "Dilemmas of externally financing domestic expenditures: Rethinking the political economy of aid and social protection through the monetary transformation dilemma," ISS Working Papers - General Series 629, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.

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    Keywords

    cash transfer; social policy; energy/fuel subsidy; adjustment policy; poverty; inequality; Iran;
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