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This report focuses on the indirect and direct effects of transfer programs. In particular, it shows how modelling results can be combined with information from standard household surveys to provide an integrated analysis of the direct distributional impact of such programs and the indirect distributional and efficiency impacts arising from domestic financing mechanisms. This approach reflects the view that any credible poverty alleviation strategy must have a credible financing strategy underlying it, and this need for domestic financing can have important consequences for both the level and the distribution of household incomes. To illustrate the approach, the report focuses on the recent introduction in Mexico of an innovative poverty alleviation transfer program called PROGRESA, which has been used as a prototype for similar programs that have recently been implemented in other developing countries.

David P. Coady was a research fellow in IFPRI’s Food Consumption and Nutrition Division at the time of writing this report. He is now a technical assistance advisor in the Fiscal Affairs Department at the International Monetary Fund. He received his Ph.D. in economics from the London School of Economics.

Rebecca Lee Harris was a postdoctoral fellow in IFPRI’s Trade and Macroeconomics Division at the time of writing this report. She is now the research director of the Globalization Research Center at the University of South Florida. She received her Ph.D. in economics from The George Washington University.

• Table of Contents, List of Tables, List of Figures, Foreword, Acknowledgments, and Summary
  (PDF 64K)
  
  
• Chapter 1: Introduction
  (PDF 37K)
  
  
• Chapter 2: Analytical Framework
  (PDF 71K)
  
  
• Chapter 3: The Computable General Equilibrium Model and Policy Simulations
  (PDF 103K)
  
  
• Chapter 4: The Spatial Distribution of Welfare Impacts
  (PDF 85K)
  
  
• Chapter 5: Summary and Conclusions
  (PDF 39K)
  
  
• Appendix A: Description of Two-Step Procedure for Integrating the Results of the CGE Model with the Disaggregated Household Data
  (PDF 38K)
  
  
• Appendix B: Details of the CGE Model Structure
  (PDF 38K)
  
  
• Appendix C: CGE Model Sets, Variables, and Parameters of the CGE Model
  (PDF 36K)
  
  
• Appendix D: Model Equations
  (PDF 44K)
  
  
• Appendix E: Supplementary Tables
  (PDF 42K)
  
  
• References
  (PDF 30K)
  
  
• Report Covers
  (PDF 273K)

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