A regional general equilibrium analysis of the welfare impact of cash transfers: An analysis of PROGRESA in Mexico.

Authors

David P. Coady
Rebecca Lee Harris, University of South Florida St. PetersburgFollow

SelectedWorks Author Profiles:

Rebecca L. Harris

Document Type

Other

Publication Date

2001

Abstract

Using a regionally disaggregated computable general equilibrium model, we analyze the differential welfare impacts of a cash transfer program targeted at rural areas. The direct effect of the transfers decreases regional income differentials, but the indirect effects depend on how the program is financed. Financing the program with a more efficient tax system is also less regressive and has favorable urban impacts. The less efficient instruments result in relatively higher incomes in all rural regions, but are more regressive. The increasing share of urban poverty highlights the shortcomings of rural targeting and raises the issue of horizontal equity.

Comments

TMD Discussion Paper: 76

Publisher

International Food Policy Research Institute

Recommended Citation

Coady, D. & Harris, R.L. (2001). A regional general equilibrium analysis of the welfare impact of cash transfers: An analysis of PROGRESA in Mexico. Washington, DC: International Food Policy Research Institute.

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