Subsidy Reforms and Poverty Alleviation

By Chandra Prakash Bhambhri, Parkash Chander

September 17, 2001

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Chandra Prakash Bhambhri, and Parkash Chander. Subsidy Reforms and Poverty Alleviation, (USA: International Monetary Fund, 2001) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper presents a general framework for characterizing the optimal pattern of subsidies for poverty alleviation under budgetary constraints and suggests possible reforms for the existing pattern of subsidies. The government may subsidize or tax goods in order to meet its objectives. The paper introduces the concept of a consumer equilibrium and shows that there are cases of equilibria in which reforms can generate not only fiscal savings but also Pareto improve the welfare of both poor and wealthy consumers.

Subject: Fiscal stance, Optimal taxation, Personal income, Poverty reduction, Public employment

Keywords: WP

Publication Details

Pages:

24
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2001/126
Stock No:

WPIEA1262001
ISBN:

9781451854909
ISSN:

1018-5941

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