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By gradually reducing the number of subsidized foods, and by focusing subsidies on foods consumed more by the poor than by the rich (like coarse baladi bread) Egyptian policymakers have found a way to self-target food subsidies to the urban poor. Yet because the rural poor do not consume as much baladi bread, this system is not as well-targeted to the rural poor.
World Bank Discussion Paper No. 336. Discusses the influence of targeted credited intervention programs among participants and non-participants living in program areas and compares them with poverty situations of households in non-program areas. The data are randomly drawn from 1,800 households in Bangladesh from both areas. The analysis shows that it takes about five years for participants to rise above the poverty line and eight years to graduate from program eligibility.
Drawing on a database of more than one hundred anti-poverty interventions in 47 countries, 'Targeting of Transfers in Developing Countries' provides a general review of experiences with methods used to target interventions in transition and developing countries. Written for policymakers and program managers in developing countries, in donor agencies, and in NGOs who have responsibility for designing interventions that reach the poor, it conveys what targeting options are available, what results can be expected as well as information that will assist in choosing among them and in their implementation. Key messages are: - While targeting 'works' - the median program transfers 25 percent more to the poor than would a universal allocation - targeting performance around the world is highly variable. - Means testing, geographic targeting, and self-selection based on a work requirement are the most robustly progressive methods. Proxy means testing, community-based selection of individuals and demographic targeting to children show good results on average, but with considerable variation. - Demographic targeting to the elderly, community bidding, and self-selection based on consumption show limited potential for good targeting. - There is no single preferred method for all types of programs or all country contexts. Successful targeting depends critically on how a method is implemented. The CD-ROM includes the database of interventions, an annotated bibliography (PDF) and Spanish and Russian translations of the book (PDFs).
In the Middle East and North Africa (MENA) countries price subsidies are common, especially on food and fuels. However, these are neither well targeted nor cost effective as a social protection tool, often benefiting mainly the better off instead of the poor and vulnerable. This paper explores the challenges of replacing generalized price subsidies with more equitable social safety net instruments, including the short-term inflationary effects, and describes the features of successful subsidy reforms.
Central American countries spend approximately one percent of their aggregate gross domestic product subsidizing residential electricity consumption. This amount is comparable with what these countries spend on education and social assistance. The pressure that electricity subsidies exert on government budgets is particularly high when international energy prices rise. Electricity subsidies also provide perverse incentives for the overconsumption of electricity as households do not pay the true cost of their consumption, which in turn reduces incentives to increase energy efficiency. This book answers key questions regarding residential electricity subsidies in Central America. In particular: How do the subsidy mechanisms function in each country? What are their fiscal costs? Are these subsidies good value for the money? How efficient are subsidies in reaching households in need, and what drives this efficiency? What are the reform options? The main message of this book is that there is considerable scope for improving the efficiency of electricity subsidies in Central America by better targeting them to low-income households. The book shows that electricity subsidies help reduce the burden of electricity costs on the lowest-income groups. However, the existing electricity subsidy schemes are very inefficient at targeting resources to low-income households, with the majority of government spending going to higher-income households. Indeed, most countries in the region have the opportunity to significantly reduce the fiscal costs of electricity subsidies without imposing significant costs on households, particularly poor households. Given the limited fiscal space in the region and the major needs of the countries in terms of social services and physical infrastructure, this study seeks to provide Central American policymakers with the analytical foundations necessary to assess the costs and benefits of their electricity subsidy mechanisms, and design effective reform strategies that reflect their unique circumstances and policy priorities.
This book reviews the prevalence and variants of consumer subsidies found in the developing world and the effectiveness of these subsidies for the poor. It places consumer subsidies in a broader social protection framework and compares them with poverty-focused programmes in other sectors using a common metric. It concludes that the most common subsidy instruments perform poorly in comparison with most other transfer mechanisms. Alternative consumption and connection subsidy mechanisms show more promise, especially when combined with complementary non-price approaches to making utility services accessible and affordable to poor households. The many factors contributing to those outcomes are dissected, identifying those that can be controlled and used to improve performance.
The Egyptian Food Subsidy System: Structure, Performance, and Options for Reform evaluates the economic, political, and technical feasibility of reducing costs while improving or maintaining the welfare of the poor. The report addresses five questions: (1) How well does the present system target the poor? (2) How much leakage- the pilferage of subsidized foods in the distribution channel-occurs? (3) At what cost does the government transfer income to the needy? (4) How can subsidies be better targeted to the needy? And (5) What are politically feasible options for reform?
This book takes forward our understanding of agricultural input subsidies in low income countries.
The persistence of an unacceptably high level of hunger and malnutrition worldwide presents a serious challenge to the world on the threshold of the third millenium. Although enough food is produced to feed mankind, about 840 million people go hungry; among them are 185 million pre-school children that are severely underweight for their age. Since an additional 80 million people have to be fed each year, achieving food security is a central global challenge, if not the most important development issue. The aim of the reader is to analyze actual problems in the field of food security and nutrition and to discuss present and future strategies to overcome hunger. Food security is a complex subject. In order to master this complexity, we distinguish between four dimensions of analyses: Theoretical-analytical, empirical-descriptive, normative-political, institutional. (Series: Spektrum. Berliner Reihe zu Gesellschaft, Wirtschaft und Politik in Entwicklungsländern/Berlin Series on Society, Economy and Politics in Developing Countries - Vol. 50)
For more than 50 years, low-cost antimalarial drugs silently saved millions of lives and cured billions of debilitating infections. Today, however, these drugs no longer work against the deadliest form of malaria that exists throughout the world. Malaria deaths in sub-Saharan Africaâ€"currently just over one million per yearâ€"are rising because of increased resistance to the old, inexpensive drugs. Although effective new drugs called "artemisinins" are available, they are unaffordable for the majority of the affected population, even at a cost of one dollar per course. Saving Lives, Buying Time: Economics of Malaria Drugs in an Age of Resistance examines the history of malaria treatments, provides an overview of the current drug crisis, and offers recommendations on maximizing access to and effectiveness of antimalarial drugs. The book finds that most people in endemic countries will not have access to currently effective combination treatments, which should include an artemisinin, without financing from the global community. Without funding for effective treatment, malaria mortality could double over the next 10 to 20 years and transmission will intensify.