Redistribution for Human Development: Welfare Gains at the Cost of Welfare Loss?

Nafisa Halim, Boston University

Income redistribution for human development is in vogue in mainstream development policy circles. Public-private partnerships to deliver social services to targeted beneficiaries are believed to be efficient and equitable and have therefore stirred up much excitement. However, skeptics worry that targeting is at best a quasi-equitable arrangement because it bypasses those who are not living in absolute poverty but are poor nonetheless. The survival analysis of infant and child mortality in Bangladesh based on household surveys in the 1990s finds more support for the latter position than the former. Evidence shows that the very poor and rich households are relatively more successful than their middle-income counterparts in suppressing deaths among children, and that welfare gains from redistributive programs targeted to the very poor are thus ambivalent at best. Findings have a number of policy implications for human development including the reform of target cutoffs or reconsideration of targeting overall.