WP 7 – The efficiency and effectiveness of targeted and conditional benefits

Evidence highlighting the good performance of means-tested transfers in terms of incidence/coverage of the target population compared with the targeting performance of universal transfers has been used in support of the expansion of targeted cash transfers in numerous countries. Indeed, in many countries, such findings have been used to justify the gradual phasing out of universal programmes and their substitution by means-tested cash transfers.

However, studies comparing the targeting performance (so defined) of means-tested transfers with universal interventions typically neglect to consider that the net effects of a public transfer on income are also determined by factors which may be grouped around three sets of considerations: administrative, behavioural and political economy (Besley and Kanbur, 1990; Sen, 1995; Gelbach and Pritchett, 2002 and Matsaganis et al, 2006).

Against this background and in light of pressures to strengthen targeting given the tightening of fiscal constraints we propose to

1. review trends in benefit targeting and conditionality practices;
2. compare the adequacy of the incomes that may be achieved while entitled to targeted benefits across the EU for the working age population;
3. examine the effectiveness of targeted provision for children, relative to universal provision.