Evaluating Alternative Approaches to Poverty Alleviation: Rice Tariffs Versus Targeted Transfers in Madagascar

By Paul A. Dorosh, David Coady, Bart Minten

January 1, 2008

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Paul A. Dorosh, David Coady, and Bart Minten. Evaluating Alternative Approaches to Poverty Alleviation: Rice Tariffs Versus Targeted Transfers in Madagascar, (USA: International Monetary Fund, 2008) 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 uses a partial equilibrium framework to evaluate the relative efficiency, distributional and revenue implications of rice tariffs and targeted transfers in Madagascar, especially in the context of identifying their respective roles for poverty alleviation. Although there are likely to be substantial efficiency gains from tariff reductions, these accrue mainly to higher income households. In addition, poor net rice sellers will lose from lower tariffs. Developing a system of well designed and implemented targeted direct transfers to poor households is thus likely to be a substantially more costeffective approach to poverty alleviation. Such an approach should be financed by switching revenue raising from rice tariffs to more efficient tax instruments. These policy conclusions are likely to be robust to the incorporation of general equilibrium considerations.

Subject: Agricultural commodities, Consumption, Imports, Personal income, Tariffs

Keywords: Demand and supply, Transfer program, WP

Publication Details

Pages:

28
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2008/009
Stock No:

WPIEA2008009
ISBN:

9781451868715
ISSN:

1018-5941

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