In-Kind Transfers

5 Key excerpts on "In-Kind Transfers"

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  Social Assistance in Developing Countries

  • Armando Barrientos(Author)
  • 2013(Publication Date)
  • Cambridge University Press

    (Publisher)

  With moderately developed financial institutions, transfers in cash are easier and cheaper to handle, and can be accounted for transparently. 19 In-Kind Transfers additionally involve procurement and distribution costs, and create incentives for monopolistic practices. 20 Of course, there are several scenarios in which this presumption in favour of income transfers does not apply. Food price volatility, especially when a significant share of food consumed is imported, can undermine the poverty reduction effectiveness of cash transfers (Sabates- Wheeler and Devereux, 2010). Food transfers shift the impact of food price volatility onto programme agencies. In-Kind Transfers are employed in developing countries mainly to ensure that poor households actually consume certain goods and services; for example, taxpayers or pro- gramme managers may impose a particular form of consumption on programme beneficiaries, such as immunisations, vitamin A, nutrition supplements, primary health care utilisation, schooling, etc. Bolsa Família requires a minimum school attendance by children in beneficiary households. One can imagine circumstances in which In-Kind Transfers could be useful in facilitating self-selection among potential beneficiaries, such as when the transfer consists of goods or services that only poor households consume. 21 There are also situations in which a combination 19 Transfers in cash through financial institutions can generate positive externalities. Beneficiaries of Brazil’s social assistance programmes receive a magnetic card that signals to financial institutions that the bearer has a regular source of income, and has been observed to facilitate credit. See Delgado and Cardoso (2000). 20 Food distribution is a case in point; see Tabor (2002). 21 An example would be staple food of a lower quality than that consumed by better-off households. For a discussion of this approach and its limitations, see Bibi (2002). Anti-poverty transfers in practice 117

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  Policy Studies: Review Annual

  Volume 3

  • Bruce B. Zellner(Author)
  • 2019(Publication Date)
  • Routledge

    (Publisher)

  See fn. 22. b See Smeeding [21], Table 6-6, p. 215, and Table 8-6, p. 286. omission, In-Kind Transfers were allocated to households on a unit-for-unit basis according to specific eligibility rules, benefit schedules, aggregate program budget totals, and recipient counts. Com puter simulations were carefully adjusted to m atch bench marks based on administrative agency data. While error in estim at­ ing the benefits received by any particular household m ay occur, a reliable esti­ mate of the antipoverty effectiveness o f health, food, and housing transfer programs will be obtained. The im putation procedures for each o f these transfer programs are briefly summarized in the Appendix. Because the m onetary costs of in-kind programs fail to measure accurately the contribution o f benefits to economic welfare, the value o f benefits received by any given household m ust be adjusted.11 This value is defined as the am ount of cash income needed to induce families to forgo a particular in-kind benefit, and is referred to as the “cash equivalent” of the benefit. It is a well-known proposition in economics that, except in special cases, an in-kind transfer is relatively less effective than a cash transfer o f equivalent cost in increasing the economic welfare o f recipients. While the sign o f the adjust­ ment necessary to transform the value o f In-Kind Transfers into the increm ent o f recipient economic welfare is know n, the magnitude o f the adjustm ent is diffi­ cult to ascertain. Because this magnitude depends upon the elasticity o f substi­ ll It may be argued that because none of the transfers treated in this paper is of the “lump-sum” variety, even cash transfers are worth less than their market value to recipients. In addition, we take no account of donor benefits accruing to transferors (net taxpayers). For a discussion of this phenomenon, see Smolensky and others [23] and Reynolds and Smolensky [ 19].

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  Economic Transfers in the United States

  • Marilyn Moon(Author)
  • 2007(Publication Date)
  • University of Chicago Press

    (Publisher)

  Hicks, John R. 1943. The four consumer surpluses. Review of Economic Studies 7. Hoagland, G. William. 1980. The effectiveness of current transfer pro- grams in reducing poverty. Paper presented to Middlebury College 169 Measuring and Valuing In-Kind Subsidies Conference on Economic Issues, 19 April, Middlebury, Vermont. Mimeo . Hochman, Harold, and James Rodgers. 1969. Pareto optimal redistribu- tion. American Economic Review 59:542-57. Krashinsky, Michael. 1980. The role of In-Kind Transfers in income dis- tribution. New Haven, Conn.: Yale University. Mimeo. Lampman, Robert, and Timothy Smeeding. 1983. Interfamily transfers as alternatives to government transfers to persons. Review of Income and Wealth, 29:45-66. MacDonald, M. 1977. Food stamps and income maintenance. New York: Academic Press. Manser, M. 1981. Analyzing in-kind income receipt using the SZPPpanel data. Washington, D.C. : Mathematica Policy Research. . 1982. Analyzing in-kind housing and medical benefits using the 1979 ZSDP panel data. Washington, D.C.: Mathematica Policy Re- search. Mayo, S. K., S. Mansfield, W. D. Warner, and L. Zwetchkenbaum. 1980. Housing allowances and other rental assistance programs-A companion based on the housing allowance demand experiment,part 2: Costs and eflciency. Cambridge, Mass.: Abt Associates Inc. Moffitt, Robert A. 1981. The negative income tax: Would it discourage work? Monthly Labor Review 103, no. 4:23-27. Morrall, John F., and Edgar 0. Olsen. 1980. The cost-effectiveness of leased public housing. Policy Analysis 6:151-70. Murray, Michael. 1980. Tenant benefits in alternative federal housing programmes. Urban Studies 17:25-34. . 1981. A reinterpretation of the traditional income-leisure model, with application to in-kind subsidy programs. Journal of Public Eco- nomics 14:69-81. Musgrave, Richard A. 1959. The theory of public finance. New York: McGraw-Hill. Nichols, Albert L., and Richard J. Zeckhauser. 1981.

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  Income-Tested Transfer Programs

  The Case for and Against

  • Irwin Garfinkel(Author)
  • 2014(Publication Date)
  • Academic Press

    (Publisher)

  In the United States, whatever intellectual arguments have been developed in support 364 M. Rein of unrestricted cash grants, in fact expenditures for in-kind benefits have grown at a more rapid rate and account for a larger proportion of total social welfare expenditures. I have tried to argue that the critical ques-tion in income testing is the problem of discounting: how to take into account the fact that people value services less than their actual cost to the public. Admittedly, the problem of measuring discounting is extremely com-plicated, partly because of the fact that those who pay taxes and those who receive benefits are different individuals. We therefore cannot sim-ply equate the burden of paying taxes and the pleasure of receiving benefits when different individuals are involved in each activity. Consider two major efforts to cash out the value of in-kind benefits. In Britain, the Central Statistical Office has devised a procedure for allocating in-kind benefits to different income classes as part of their effort to examine trends in the redistribution of household income. Es-sentially they allocate current cost to average use of individuals based on age and sex. Over the years they have improved these estimates by securing better information on the use made of particular health and education facilities. The Commission on Income Distribution and Wealth observed critically that benefits that households obtain from these services may only approximate broadly the cost of their provi-sion. This analysis led the commission to reach the following gloomy conclusion: Where the value of the service lies partly in its ready availability and partly in the actual use made of it, there is no agreed method of valuing the benefits [Great Britain, Royal Commission on the Distribution of Income and Wealth, 1976, p. 26]. In the United States the question of cashing out in-kind benefits has arisen largely in relation to an effort to measure the extent of poverty.

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  Poor Poverty: The Impoverishment of Analysis, Measurement and Policies

  The Impoverishment of Analysis, Measurement and Policies

  • United Nations, Anisuzzaman (Anis) Chowdhury, Jomo Kwame Sundaram, Anisuzzaman (Anis) Chowdhury, Jomo Kwame Sundaram(Authors)
  • 2011(Publication Date)
  • Bloomsbury Academic

    (Publisher)

  The Zambian, Ethiopian and Somalian experiences offer encouraging evidence that cash transfers are affordable and conducive to livelihood revival in chronically poor areas. Of course, in emergencies, cash grants should not be seen as pure alternatives to forms of commodity-based aid. Such transfers might be inflationary if food supplies were unavailable. In the aftermath of a disaster, food aid may need to complement cash transfers, to restrain inflationary pressures. Commodity aid can then be gradually phased out as local producers respond to the increased demand for staple goods and services. However, cash transfers may need complementary programmes designed to boost local supply, as was the case following the Mozambique floods in 2000.

  Among the growing number of schemes launched outside Africa as part of emergency and rehabilitation programmes is the Cash for Herder scheme in Mongolia, implemented by the Swiss Agency for Development and Cooperation (SDC) and the Red Cross in 2002–2003. The evaluation two years later found that while an in-kind project was “appreciated” by recipients, it had not helped regenerate the economy, whereas the cash transfer had led to investment in assets that regenerated livelihoods. It concluded:

  The cash approach made use of the creativity and experience of beneficiary families to develop strategies out of their crisis … [It] showed that poor people and people under severe economic stress are very well capable to handle cash responsibly and develop and take strategic decisions on what to spend the money in order to improve the livelihood and their families in the medium and long term … most important, beneficiaries do become economic and social actors in their own community again (SDC-IFRC, 2005 ).

  The evaluation also found that “the response and preparation time” was short and administrative overheads were low. Encouraged, by 2005, the SDC had implemented 13 cash grant projects of this type in eight countries.

  The growing legitimacy of cash transfers was also reflected in the Group of Eight Statement of 2004, which, when referring to the international response to famines, made the commitment, “we will unleash the power of markets through cash-for-work and cash-for-relief programs” (G8 Statement, 2004). The scope for cash transfers in Africa and Asia is thus recognized as part of the armoury of aid and humanitarian responses to poverty and insecurity. Meanwhile, in Latin America, cash transfers have become central to social and development policy.

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