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

_IMF Working Papers, January 1, 2008_

## Source details

**Canonical URL:** [Evaluating Alternative Approaches to Poverty Alleviation: Rice Tariffs Versus Targeted Transfers in Madagascar](https://www.imf.org/en/publications/wp/issues/2016/12/31/evaluating-alternative-approaches-to-poverty-alleviation-rice-tariffs-versus-targeted-21548)

## Other formats

- [Markdown version](/en/publications/wp/issues/2016/12/31/evaluating-alternative-approaches-to-poverty-alleviation-rice-tariffs-versus-targeted-21548/index.md)
- [Structured JSON version](/en/publications/wp/issues/2016/12/31/evaluating-alternative-approaches-to-poverty-alleviation-rice-tariffs-versus-targeted-21548/index.json)
- [Bundle manifest](/en/publications/wp/issues/2016/12/31/evaluating-alternative-approaches-to-poverty-alleviation-rice-tariffs-versus-targeted-21548/bundle-manifest.json)

## Bibliographic details
- Authors: Paul A. Dorosh, David Coady, Bart Minten
- Published: January 1, 2008
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451868715.001

---

### Summary and objective
- Uses a partial equilibrium framework to evaluate the relative efficiency, distributional, and revenue implications of rice tariffs and targeted transfers in Madagascar, with a focus on their roles for poverty alleviation.
- Concludes that although tariff reductions generate substantial efficiency gains, those gains accrue mainly to higher income households.
- Identifies that poor net rice sellers will lose from lower tariffs.
- Argues that well designed and implemented targeted direct transfers to poor households are likely to be a substantially more costeffective approach to poverty alleviation.
- Recommends financing such targeted transfers by switching revenue raising from rice tariffs to more efficient tax instruments.
- Notes that these policy conclusions are likely to be robust to the incorporation of general equilibrium considerations.

### Key findings (efficiency, distribution, revenue)
- Tariff reductions:
  - Likely to produce substantial efficiency gains.
  - Efficiency gains accrue mainly to higher income households.
  - Lower tariffs harm poor net rice sellers.
- Targeted direct transfers:
  - More costeffective for poverty alleviation compared with rice tariff policy.
  - When well designed and implemented, targeted transfers better protect poor households.
- Revenue implications:
  - Financing targeted transfers should involve moving revenue raising away from rice tariffs and toward more efficient tax instruments.

### Policy recommendations
- Develop and implement a system of well designed and implemented targeted direct transfers to poor households.
- Finance targeted transfers by switching revenue raising from rice tariffs to more efficient tax instruments.
- Consider that the main policy conclusions are likely robust even when general equilibrium effects are incorporated.

### Methodology note
- Analytical framework: partial equilibrium model applied to rice tariffs and targeted transfers in Madagascar.
- Focus on relative efficiency, distributional impacts, and revenue effects.
- Authors note robustness of conclusions to general equilibrium considerations.

---

## Content in this bundle

- **Wp0809**
  - [Wp0809 (Markdown version)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2008/_wp0809.pdf.md){rel="alternate" type="text/markdown"}
  - [Wp0809 (PDF)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2008/_wp0809.pdf){rel="external" type="application/pdf"}

---

_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/evaluating-alternative-approaches-to-poverty-alleviation-rice-tariffs-versus-targeted-21548_