Short- and Long-Term Poverty and Social Policy in a “Snakes and Ladders” Model of Growth

Author/Editor:

Alfredo Cuevas

Publication Date:

November 1, 2001

Electronic Access:

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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:

Throughout the world, the great popularity of programs to protect those who may fall into poverty stands in contrast with the weakness of policies aimed at helping individuals who are already poor to overcome long-term poverty. In the paper, an OLG model with persistent poverty and limited social mobility is used to explore some of the reasons for the different success rates of these two types of policies, as well as the gains that can be expected from these and other policies in terms of economic growth. The popularity of social insurance schemes may be due to their relative ex-ante fairness, while the reluctance of societies to support effective policies to reduce long-term poverty may be explained by the redistributive bias of these policies, especially in the short term. However, the failure to attack long-term poverty can reduce long-run growth.

Series:

Working Paper No. 01/172

Subject:

English

Publication Date:

November 1, 2001

ISBN/ISSN:

9781451858570/1018-5941

Stock No:

WPIEA1722001

Format:

Paper

Pages:

32

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