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Benefit Incidence and Targeting Performance: A New Framework with Application to Subsidies for Infrastructure and Human Development in Africa

Sponsor: Thematic Group on Poverty Impact Analysis, Monitoring and Evaluation

Presenters: Diego Angel-Urdinola, Prospere Backiny-Yetna, and Quentin Wodon

Description: This seminar will present a synthesis of several papers recently written on the benefit incidence of public spending in Africa, with a focus on water and electricity subsidies, as well as on subsidies for the social sectors (among others education, nutrition, and health). The seminar will first provide a new framework to analyze the determinants of the targeting performance of subsidies. While most indicators of benefit incidence are silent as to why subsidies are targeted the way they are (they only give an idea whether they reach the poor or not and to what extent), we develop a simple decomposition that allows for analyzing both access and subsidy-design factors that influence targeting performance while also providing an indicator of performance. The second part of the seminar will present applications of the framework to a range of subsidies in West and Central African countries. The last part of the seminar will introduce a simple simulation tool that can be used to estimate the key parameters used for assessing the drivers of benefit incidence and targeting performance.


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